The government faces the challenge of finding a balance between the need to adjust public accounts and the need to maintain the pace of recovery economic. The economic team seeks measures that are effective in reducing the fiscal deficit without harming economic growth.
THE National Treasury calculated that the primary deficit, which represents the result of public accounts before payment of interest on the debt, would need to be R$123.9 billion in 2025 and R$106.1 billion in 2026 to meet the PPA targets.
However, the current scenario indicates a deficit of R$230 billion in 2025 and R$180 billion in 2026, which requires measures to reduce this difference.
Possible measures to achieve fiscal targets
- Increase in revenue: One alternative to increase revenue would be tax reform, which is currently being processed by the National Congress. The reform aims to simplify the tax system and increase the efficiency of tax collection;
- Cost reduction: The economic team is also evaluating the possibility of reducing discretionary expenses, which are those that can be cut without affecting essential services. This measure could include cuts in investments and personnel expenses;
- Review of fiscal targets: The last alternative would be to review the fiscal targets for 2025 and 2026, adjusting them to the current economic scenario. This measure, however, could affect market confidence in the government's ability to control its public accounts.
Challenges for the government
The challenge of balancing fiscal adjustment and economic growth, however, the government faces the challenge of finding a balance between the need to adjust public accounts and the need to maintain the pace of economic recovery.
For that, The economic team seeks measures that are effective in reducing the fiscal deficit without harming economic growth.
The review of fiscal targets for 2025 and 2026 is a necessary measure to ensure the sustainability of public accounts. However, it is important that the government does so responsibly, seeking measures that do not affect economic growth.
Other information
- The primary deficit is the result of public accounts before payment of interest on the debt;
- The PPA is a plan that defines the government's goals and priorities for a four-year period;
- Tax reform aims to simplify the tax system and increase the efficiency of tax collection;
- Discretionary expenses are those that can be cut without affecting essential services.
