Brazil Fiscal Target Met Only Through Legal Carve-Outs
Brazil's 2026 fiscal target will be formally met, but only through legal carve-outs that mask a deepening underlying deficit, according to the IFI. The post Brazil Fiscal Target Met Only Through Legal Carve-Outs appeared first on The Rio Times .
Brazil's fiscal target for 2026 was met only through legal exemptions, according to a technical watchdog. The underlying deficit is double the 2025 level, indicating Brazil's finances are deteriorating rather than improving. The Independent Fiscal Institute (IFI), a non-partisan body attached to the Federal Senate, reported an effective primary deficit of about 0.4% of GDP, which is significantly higher than the target.
The target-basis surplus, measured after legal exclusions, was about 0.1% of GDP, meeting the compliance requirement. However, the IFI emphasizes that the effective deficit is what truly matters for the debt trajectory. The dual results—deficit on the underlying measure and surplus on the target-verification measure—highlight the gap between formal compliance and the real fiscal situation.
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