Lula Signs 2025 Budget Law With Vetos on Party Fund and Amendments, Sets Neutral Fiscal Target

Dec 31, 2024, 02:15 PM

Brazilian President Luiz Inácio Lula da Silva has signed into law the 2025 Budget Guidelines Law (LDO) with several vetoes, as published in the Official Gazette on December 31. The LDO sets a neutral primary result target for 2025, with a tolerance margin of 0.25% of the projected GDP, equivalent to 30.97 billion reais. It also establishes a primary deficit target of 6.21 billion reais for the Global Expenditure Program, excluding companies like those in the Petrobras and ENBPar groups, and expenses related to the New Growth Acceleration Program (PAC), capped at 5 billion reais. Among the vetoes, Lula rejected provisions that would have increased the party fund and restricted the blocking of parliamentary amendments. The government argued that increasing the party fund was incompatible with a sustainable fiscal regime, and that blocking amendments was necessary for fiscal compliance. The LDO was approved by Congress on December 18, maintaining the government's goal of zeroing out the public accounts deficit for 2025.