Brazil's Congress approves 2025 budget bill with higher surplus projection

BRASILIA (Reuters) -Brazil's Congress approved on Thursday a 2025 budget bill that foresees a primary surplus of 15 billion reais ($2.66 billion) for the central government this year, up from the 3.7 billion reais projected in August by the government.

The text, sponsored by Senator Angelo Coronel, states that revenue projections were revised upward, leading to an improved primary balance forecast.

The bill now has to be signed into law by President Luiz Inacio Lula da Silva to take effect.

Lula passed a new fiscal framework in 2023, his first year in office, which combines a primary balance target with a cap limiting spending growth to up to 2.5% above inflation.

For this year, the target is a zero primary deficit, with a margin of 0.25% of gross domestic product, meaning the government can post a deficit of as high as 30.9 billion reais and still comply with the rule.

Coronel said he incorporated changes requested by the federal government, including higher spending on social security benefits and a reduction in expenditures on the Bolsa Familia welfare program, which provides monthly cash transfers.

Traditionally, the annual budget bill is approved before the end of the preceding year. This year's significant delay underscores the challenges faced by Lula's leftist administration in its relationship with Congress.

($1 = 5.6486 reais)

(Reporting by Marcela Ayres in Brasilia; Editing by Kirsten Donovan, Mark Porter and Jamie Freed)