Federal Government aims to zero deficit fiscal target; the tolerance margin for 2025 is up to R $ 30.9 billion
The Government (PT) announced on Thursday (22.MAI.2025) the freezing of R $ 31 billion from the 2025 budget. The information was given by the Minister of Transport, Renan Filho, and later confirmed by the Ministry of Planning and Budget. It will be R $ 10.6 billion blocked and R $ 20.7 billion contingency.
There are technical differences between blocking and contingency, but in practice the federal government is prevented from spending R $ 31.3 billion on discretionary expenses provided for in the budget. These expenses are not required and are focused on investments, public machine funding, scientific research financing and other areas.
In April 2025, this year’s LOA (Annual Budget Law) provided for an amount of R $ 170.7 billion in discretionary expenses. Each quarter, the government updates the projections of collection and public spending and discloses the new parameters in the Bimonthly Revenue and Expenses Assessment Report.
Freezing spending can be done in two ways:
- Contingency – When previously expected revenues are below the current forecast of the economic team;
- Blockade – When expenses are above the previously estimated.
Because of, the tax authorities did not disclose in 2025 any monthly reports with the collection data. Part of the information can be seen in the National Treasury report, which says the Lula government in the 1st quarter of 2025, the best result for the period since 2022.
The federal government aims to zero deficit fiscal target, as it was in 2024. The margin of tolerance to 2025 is up to R $ 30.9 billion of negative balance, which corresponds to 0.25% of GDP (Gross Domestic Product).
In 2024, public accounts is a primary deficit of R $ 11.0 billion, within the allowed range of the fiscal target. The spending on the reconstruction of Rio Grande do Sul and the burning in the country did not enter the calculation, which would raise the negative balance to $ 44.0 billion. The limit of the previous year was a deficit of up to R $ 28.8 billion.
