🧮 Does the fiscal math add up?

Good morning! Brazil’s mid-month inflation reached 4.96% in 12 months (up from 4.5% in January), according to data published minutes ago by the country’s official statistics agency. Housing, education and food costs were the main culprits behind the rise.

Spending watchdog raises budget concerns

The House's Financial and Budgetary Oversight Advisory Office (Conof) published a report estimating a primary deficit of BRL 63 billion for Brazil’s central government in 2025 — significantly higher than the BRL 40.4 billion deficit projected in the 2025 Budget Bill, which still awaits congressional approval.

👉 Why it matters. “Looking beyond the short term,” Conof warns, “it’s important to note that while fiscal performance targets have been met, these successes alone have not sufficed to stabilize the mounting public debt — which continues to grow as a percentage of GDP.”

State of play. In 2023, the current administration unveiled a fiscal framework that permits a margin of error of ±0.25% of GDP around its zero-deficit primary target. Yet, government officials are now grappling with the challenge of upholding these fiscal promises.

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