Brazil’s Haddad Reaffirms Fiscal Commitment While Dodging Questions on 2024 Budget Target

Brazilian Finance Minister Highlights Commitment to Fiscal Balance

BRASILIA – Brazilian Finance Minister Fernando Haddad asserted on Monday his intention to maintain "fiscal balance" during his tenure, although he did not clarify whether the government still aims to eliminate the budget deficit by 2024.

Haddad stated, "My goal has been set, I will seek fiscal balance," while addressing reporters in Brasilia. This comes in the wake of President Luiz Inacio Lula da Silva’s comments last week indicating a lack of urgency for the government to achieve a zero fiscal deficit next year.

The president’s remarks sparked concern in financial markets and raised doubts about his administration’s dedication to fiscal responsibility.

When pressed on whether the government would change its goal of eradicating the primary deficit next year, Haddad was noncommittal during a press conference. He focused instead on the need for fiscal rebalancing in response to challenging conditions, admitting that significant tax concessions are impacting Brazil’s tax revenue and that borrowing costs remain high.

"We presented to the president the current situation regarding tax revenue, which is not meeting our expectations," Haddad noted. "I informed the president that we have several alternatives, including the possibility of bringing forward some measures originally planned for 2024."

Haddad also indicated that he had been instructed by the president to communicate this fiscal scenario to legislators.

The objective of eliminating the primary deficit in 2024 was part of new fiscal rules introduced by Lula’s government and approved by Congress earlier this year, aimed at curbing uncontrolled public debt growth amid increasing social spending.

Despite ongoing skepticism from both the market and political factions within Lula’s administration, Haddad has previously defended the feasibility of this target, contingent on the passage of government-designed measures intended to enhance public revenue.