BRASILIA (Reuters) -Brazil’s Senate has approved a constitutional amendment that will gradually include court-ordered debt payments in fiscal target calculations starting in 2027, easing fiscal pressure ahead of next year’s presidential election. WHY IT’S IMPORTANT A Supreme Court waiver allows only part of these payments to count toward Brazil’s fiscal goals, but this exemption expires […]
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Brazil’s Congress clears new fiscal rule for court-ordered debt payments
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BRASILIA (Reuters) -Brazil’s Senate has approved a constitutional amendment that will gradually include court-ordered debt payments in fiscal target calculations starting in 2027, easing fiscal pressure ahead of next year’s presidential election.
WHY IT’S IMPORTANT
A Supreme Court waiver allows only part of these payments to count toward Brazil’s fiscal goals, but this exemption expires after 2026.
Without the amendment, which was passed by the Senate late on Tuesday, including the full debt payments would render fiscal targets unfeasible, according to government forecasts.
BY THE NUMBERS
Brazil’s economic team estimates that court-ordered debt payments will exceed 120 billion reais ($22.14 billion) in 2027, but under the new rule only 10% of the total will initially count toward the primary budget target.
The full amount will be phased into fiscal calculations over a period of up to 10 years.
WHAT’S NEXT
The proposal, having cleared two rounds of voting in both legislative chambers, now awaits formal publication to become valid.
($1 = 5.4212 reais)
(Reporting by Marcela Ayres; editing by Philippa Fletcher)