Brazil's treasury secretary suggests raising spending limit in 2027
SAO PAULO, May 6 (Reuters) - The spending limit established by Brazil's fiscal framework should be raised from 2027 to incorporate the excess of court-ordered payments, Treasury Secretary Rogerio Ceron said on Tuesday.
Ceron said that there was still no government decision on the matter, but that an eventual expansion should be limited to the amount necessary for those payments, not allowing for other additional expenses.
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The court-ordered payments are seen ranging from 30 billion to 40 billion reais ($5.25-6.99 billion).
"Given the level of court-ordered payments, which is not coming down, maybe the country will not be able to resolve this in the short term," he said.
Brazil's Supreme Court allowed part of the payments to be paid outside of the fiscal framework until 2026, but from 2027 they will again be included in the spending limit, with the government already anticipating a squeeze on public accounts.
This year, the Brazilian government should pay 70 billion reais in court-ordered debt in July, an amount that Ceron considers should not pressure inflation.
He also said that Brazil is committed to its fiscal rules but reforms are necessary to ensure they are preserved. A recent drop in commodity prices, as well as a stronger Brazilian currency, affect the country's tax revenues, he added.
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