In a decision that brings relief to the government, the The Federal Court of Auditors (TCU) accepted this Wednesday (15) an appeal from the Federal Attorney General’s Office (AGU) and suspended the requirement that the federal government seek the center of the fiscal targetzero deficit for 2025.
The measure, taken in a monocratic manner by Minister Benjamin Zymler, represents a significant victory for the Executive, as eliminate, at least for now, the risk of an additional blockage of up to R$31 billion in this year’s Budget.
In September, the TCU ministers had issued a warning that the government that should pursue the central result of the primary result targetconsidered a sign of commitment to fiscal responsibility.
THE AGU, however, argued that the most appropriate interpretation of the standard would be compliance within the tolerance band — which allows a variation of 0.25% of the Gross Domestic Product (GDP) up or down.
In practice, This allows the Union to work with the lower limit of the target, a deficit of up to R$31 billion.
“Serious risk” to public policies
When accepting the appeal, Zymler justified his decision by the “practical impossibility” of imposing a new contingency this year and by the “serious risk” that an additional blockade of the Budget would represent for the execution of essential public policies. The minister also highlighted that the topic involves “unprecedented and complex matter”, with differences of technical understanding both within the Executive and in the court itself.
In practice, Zymler’s decision allows the government to target a primary deficit of R$31 billion in the 2025 Budget. government maintained that the imposition of the TCU would compromise the functioning of the public machine and paralyze strategic programsespecially in social and investment areas.
The rapporteur accepted the argument and granted a suspensive effect until the final judgment of the case by the court’s plenary.
Questions about framework
The decision immediately relieves pressure on federal accounts and ensures greater predictability for the 2025 budget execution. However, several economists warn of the symbolic effects of the measure on the credibility of the goals established by the fiscal framework.
The controversy brings about the debate over the definition of the correct “target” of fiscal policy: the center of the target, as defended by the TCU, or the tolerance range provided by law, as the government maintains.
Zymler’s decision, in agreeing with the AGU, signals a change in understanding that favors a broader and more pragmatic interpretation of the rule.
The government claims that the spending cut package approved by Congress at the end of last year ended the “duty to execute” the Budget, allowing the government to target any value within the tolerance band of the fiscal framework.
Although temporary, the measure has relevant political implications for the government’s fiscal framework. It occurs amid negotiations on the Budget Guidelines Law (LDO) and the government’s effort to maintain the execution of priority programs without further cuts.
In Congress and the TCU, however, the debate on the need to preserve fiscal discipline will continue in 2026.
Zymler’s decision is valid until the final judgment of the case by the TCU Plenary, scheduled for 2026. The court may determine the pursuit of the center of the goal for next year, stipulated in a primary surplus of R$34.3 billion.
If it continues to allow the economic team to aim for the target floor, the government could end next year with zero deficit, within the tolerance margin of 0.25% of GDP.
