LDO conditions BRL 172 billion above the ceiling to approval of the framework

“This authorization (of resources above the ceiling) will enable the recomposition and execution of priority public policies for the country, the functioning of the machine and the Union’s investment”, informed the Ministry of Planning in a note.

Expenditures above the current spending ceiling add up to BRL 188 billion in 2025 and BRL 188.5 billion in 2026. Although the text has been adapted to the new fiscal framework, the current version sent to Congress must comply with the current ceiling, with an annex with the parameters and expenses foreseen within the future fiscal framework

fiscal targets

The project brought the targets for public accounts according to the new fiscal framework. The primary result forecast for 2024 is at zero (neither deficit nor surplus). The text estimates a primary surplus of BRL 61.61 billion in 2025 and BRL 130.83 billion in 2026.

These targets will have a band of 0.25% of Gross Domestic Product (GDP) up or down. With the intervals, there will be a tolerance margin of R$ 28.756 billion for 2024. As the bill refers only to the next year, there are no tolerance values ​​for the target for 2025 and 2026. The primary result represents the deficit or surplus in government accounts without interest on the public debt.

Expected to be sent to Congress on Monday (17), the new tax framework it will combine primary result targets with a cap on real growth (above inflation) of public spending between 0.6% and 2.5% per year. Within this band, expansion will be capped at 70% above-inflation growth in net income over the previous 12 months.

If the framework is not approved and in effect by August 31, the 2024 Budget project may contain expenses outside the ceiling. These expenses, however, would be frozen, without being executed until the new rules have been approved and entered into force.

“Such expenses could not be executed and would not be considered for the purpose of demonstrating compatibility with the target and the current spending ceiling”, informed the Ministry of Planning in a message sent to Congress along with the project.

election fund

The 2024 LDO project proposes that the Special Campaign Financing Fund (FEFC) have as a maximum value the amount authorized for the 2022 elections. Last year, according to the Superior Electoral Court, the fund had R$ 4.961 billion available.