Vice President says Haddad will have “full support” to contain spending and try to meet 2025 tax target
Vice-president and Minister of Industry and Commerce, Geraldo Alckmin, said on Monday (26.MAI.2025) that Finance Minister Fernando Haddad (PT) will have “full support” in the freezing of R $ 31 billion from the 2025 budget.
“Haddad will have all our support, integral, to do everything that needs to be done: the contingencies and the fiscal effort to not have a deficit,” said Alckmin during the Nova Industria Brasil event, at the headquarters of BNDES (National Bank for Economic and Social Development) in Rio de Janeiro.
The government of Luiz Inacio Lula da Silva (PT) announced on the last Thursday (22.MAI) the blockade of R $ 10.6 billion and the contingency of R $ 20.7 billion from the budget. The information was given by Transport Minister Renan Filho (MDB) during the MSVIA optimization auction and later confirmed by the Ministry of Planning and Budget. This is the presentation (PDF – 400 kb).
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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.
The detail of the containment by an agency will be disclosed in attached to the budget and financial programming decree, which will be published on May 30. Ministries should indicate the schedules to be blocked and contingent within 5 business days.
In April 2025, this year’s LOA (Annual Budget Law) provided for an amount of R $ 221.1 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.
