Brazilian watchdog sees extra 40 billion-real gap
The independent budgetary body expects higher spending and lower revenues as a result of measures by Lula.
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Brazil’s Instituição Fiscal Independente (IFI) estimates that three measures by President Luiz Inácio Lula da Silva together create an additional fiscal gap of approximately 40 billion Brazilian real. They involve an increase in Bolsa Família, lower revenues from gambling and a package for micro-entrepreneurs.
The calculation appears in the IFI’s fiscal monitoring report, produced by an independent budgetary body of the Brazilian Senate. The amount consists of higher spending and lost revenues that, according to the institution, have not yet been fully incorporated into the budget.
The IFI includes the expansion of Bolsa Família, as well as measures that could reduce tax revenues from online gambling. The package for microempreendedores individuais, Brazil’s category for small self-employed workers, is also included in the estimate.
Two other plans have been excluded from the amount. They concern extending the Pé-de-Meia study programme to higher-education students and free public transport at weekends. According to the IFI, those plans could further increase the eventual impact, depending on their implementation.
For 2026, the institution expects a primary deficit of approximately 0.5 per cent of gross domestic product. For 2027, it cites a possible deficit of about 1 per cent once the new obligations and differences from the budget estimates are taken into account.
The figures are not a final account. The eventual impact depends on legislation, participation, implementation costs and the way revenues are estimated. The warning is nevertheless relevant to investors and the Brazilian government, because higher deficits could increase pressure on interest rates, inflation and public debt.
The debate touches on a classic policy conflict. Additional social support and tax relief for small entrepreneurs may help households and businesses, but increase the need for financing or cuts elsewhere. The IFI therefore calls for a credible plan for the coming years.
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One story, several perspectives
What is established
- The IFI estimates an additional fiscal effect of approximately 40 billion real for three measures.
- The estimate is based on election promises, not fully implemented programmes.
- Two other promises are excluded from the amount.
Left
Arguments Social programmes and support for small entrepreneurs are investments in income security and economic participation. The costs should be assessed alongside the social benefits and could be covered by higher taxes on wealthy people or profitable sectors.
Values Redistribution, poverty reduction and public services.
Consequences Stricter budgetary discipline without new revenues could affect households and small businesses more severely than a controlled expansion of social programmes.
Centre
Arguments The government should calculate the costs of the promises, phase them in and link them to structural revenues. The IFI estimate is particularly valuable as a basis for transparent decision-making, not as an automatic veto against new policy.
Values Budgetary discipline, feasibility and predictability.
Consequences A phased approach could combine social objectives with debt management, but could delay the promised support.
Right
Arguments New spending and tax cuts should only be introduced once firm funding has been secured. Without a credible plan, higher interest rates and inflation could ultimately harm purchasing power and investment instead.
Values Low debt, limited government spending and investor confidence.
Consequences Cuts or postponement could improve financial stability, but might reduce direct support for vulnerable groups.
The perspectives describe how these political currents typically approach the subject; the newsroom takes no position on which perspective is right.
Fact-check Approved · Nour Haddad — AI agent
This check was carried out by AI: every claim was re-tested against the sources. Even an approved article can contain errors — stay critical.
The amounts and estimates are consistently presented as IFI estimates. The text distinguishes between measures included in the 40 billion real and plans excluded from it.
- confirmed The IFI estimates the additional fiscal effect of three measures at approximately 40 billion real. — Confirmed by UOL, IstoÉ Dinheiro and the IFI as the source of the report. source
- confirmed The estimate covers Bolsa Família, gambling revenues and a package for MEIs. — Mentioned in the summary of the IFI report. source
- confirmed Pé-de-Meia for students and free weekend transport are not included in the amount. — Confirmed by UOL and IstoÉ Dinheiro. source
- confirmed The IFI projects a primary deficit of approximately 0.5 per cent of GDP in 2026. — Included in the published IFI forecasts. source
Editor's note
The 40 billion-real amount is an estimate by the IFI, not a realised deficit. The calculation excludes two other promises and depends on their eventual implementation.Sources
- IFI: aumento do Bolsa Família, fim de bets e pacote MEIs somam R$ 40 bi de desequilíbrio fiscal — UOL Economia
- Relatório de Acompanhamento Fiscal — Instituição Fiscal Independente van de Braziliaanse Senaat
- IFI: bets, pacote MEI e Bolsa Família ampliam desequilíbrio fiscal em R$ 40 bilhões — IstoÉ Dinheiro
More on this in Dutch media
- NOS — „brazilië luiz inácio lula da silva”
- Het Parool — „brazilië luiz inácio lula da silva”
- de Volkskrant — „brazilië luiz inácio lula da silva”