Brazil's federal government projects that it must review at least R$ 53.7 billion in mandatory spending by 2030. The projection is part of the 2027 annual budget bill, known as PLOA, which Congress received on August 31. According to Folha de S.Paulo, the review is needed to keep other public programs funded at their current levels.
The figure could climb to R$ 63.6 billion. That version includes the extra room required to meet the minimum health funding floor in 2028 and 2029. The estimates measure the gap between what government agencies expect to spend to keep policies running and the space actually available for discretionary programs under the fiscal framework, the rule that has capped federal spending growth since 2023.
The bill does not say which measures would deliver the savings. If none materialize, the number shows the size of the cut the executive branch would have to make in discretionary programs to stay within the rules. The projections sit in the medium-term budget section of the bill, which flags spending bottlenecks for the three years after 2027. O Globo reported that the government itself admits funding for public programs could run short from 2028 without the review.
Planning and Budget Minister Bruno Moretti accepted the need for a review but cautioned about the number. He told Folha the instrument has methodological limitations and will need improvement. Moretti took office on March 31.
"The conclusion that a review is needed is correct, but the methodological limits of using this instrument as a projection are large," Moretti told Folha. He said the calculation works from aggregate spending figures.
The 2027 budget
Presented by Moretti and Finance Minister Dario Durigan, the 2027 bill projects a primary surplus of R$ 83.4 billion, about R$ 10 billion above the target of R$ 73.2 billion, or 0.5% of GDP, according to state news agency Agência Brasil. Once spending outside the framework, such as court-ordered debt payments, is included, the effective surplus falls to R$ 18.6 billion. The bill estimates net revenue of R$ 2.849 trillion and total spending of R$ 2.83 trillion.
"One of our central messages is that next year we will have a balanced budget," Moretti said at the presentation. He credited triggers in the fiscal framework that hold back mandatory spending: a cap on civil servant raises of 0.6% above inflation should save about R$ 9 billion, and a ceiling of 2.5% above inflation for revenue-linked expenditures should save another R$ 8.9 billion. According to CNN Brasil, Durigan said the government plans to review tax benefits gradually.
The bill now sits with Congress, which must pass the budget law by December 31. What remains open is which mandatory expenditures the government will revise to close the R$ 53.7 billion gap projected through 2030.