MNI BRIEF: Brazil Announces BRL 31.3 Bln 2025 Spending Freeze

The Brazilian government announced a BRL 31.3 billion spending freeze in the 2025 budget on Thursday, with BRL 10.6 billion due to higher expenses and BRL 20.7 billion due to lower-than-anticipated revenues in the first four months of the year.

The breakdown of the budget restraint by agency will be included in an annex to the Budget and Financial Programming Decree, which will be published on May 30, the Ministry of Planning and Budget said.

Finance Minister Fernando Haddad highlighted at a press conference that the government will release a measure related to the Tax on Financial Transactions (IOF) at 4 p.m. ET.

The spending freeze, along with the IOF measure, had been expected by the market as part of the government’s effort to reach this year’s zero-deficit target. (See: MNI INTERVIEW: Lack Of BCB Guidance Doesn't Mean End Of Cycle)