The conclusions are from the technical team of the Specialized Unit in Budget, Taxation and Fiscal Management
O Federal Court of Auditors (TCU) pointed out on Wednesday, 3, the “insufficiency of current fiscal targets” to stabilize the government’s gross debt (DBGG) in relation to GDP. The upward trajectory of debt was also highlighted in all scenarios projected until 2029.
As conclusions are from the technical team of the Specialized Unit in Budget, Taxation and Fiscal Management (AudFiscal).
This Wednesday, the Plenary of the Court of Auditors determined that the National Treasury will now make clear the level of fiscal results “consistent with the stabilization” of gross debt in relation to GDP over a ten-year horizon. The obligation is for the next budget guidelines bills.
The TCU team evaluated the official projections published by the National Treasury in the Fiscal Projection Reports (RPFs) and in the Public Debt Projection Reports (RPDPs). The calculations carried out by the inspection showed that, even with the fulfillment of fiscal targets, the stabilization of the debt/GDP ratio is not assured in the projections.
“The team concluded that effective fiscal targets are insufficient to ensure the stabilization of DBGG until 2029 in all projected scenarios, including the one that assumes full compliance with the effective primary result targets established in LDO 2026 [para os próximos anos]”, details the ruling.
In the reference projection scenarios, the TCU sees the “increasing dependence” on so-called conditional revenues as a central problem. Examples are revenue estimates that depend on the prior approval of new legal measures.
The fiscal framework law, approved in 2023, began to require the compatibility of fiscal targets with the medium-term objective of stabilizing the debt/GDP ratio.
Other inconsistencies highlighted by the TCU inspection include: deterioration of payment capacity indicators; gap between the effective primary result and the estimated stabilizer; and, furthermore, insufficient transparency of official DBGG/GDP projections regarding sensitivity to conditional revenues. The “interest/revenue” indicator was the one that showed the worst evolution in the three-year period from 2023 to 2025, according to the inspection.
