BRASILIA, Oct 19 (Reuters) – Brazil’s Planning Ministry said on Monday that the budget reallocations needed to accommodate measures recently announced by President Luiz Inacio Lula da Silva as he seeks re-election in next Sunday’s vote amount to about 20 billion reais ($3.95 billion) in the 2027 budget.
In a statement, the ministry said the amount represents just over 1% of total primary expenditure subject to spending limits under Brazil’s fiscal framework, adding such adjustments will be made while preserving both the overall spending cap and the government’s primary budget target.
• Leftist Lula has unveiled a string of measures ahead of Sunday’s runoff after trailing right-wing Senator Flavio Bolsonaro in the first round
• Announcements range from free nationwide weekend public transport, which has yet to be formally submitted to Congress, to a 15% increase in the Bolsa Familia welfare program that is already being implemented
• The government said the Bolsa Familia increase alone would cost 22 billion reais in 2027
• The Planning Ministry did not explain how the budget reallocations required to fund the broader package of measures would amount to less than that
• The ministry said estimates circulating publicly about the total fiscal impact wrongly combine measures with different funding sources and implementation timelines, arguing some policies, such as fuel tax relief, have been offset by higher oil-related revenue
• It added that public policy implementation should not automatically be viewed as election-driven spending
($1 = 5.0612 reais)
(Reporting by Marcela Ayres; Editing by Fernando Cardoso)
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