During a conference presenting updates on economic and budgetary forecasts, Nazaré da Costa Cabral emphasized that the recommendation for the State Budget 2026 is to exercise “caution” and uphold “political responsibility.”
The president of the independent entity monitoring public finances warned, “We often talk about the budgetary slack; if it exists, it is very limited and does not allow for any kind of adventures.”
While acknowledging a collective desire for “a lighter tax burden and a more streamlined tax system” to boost economic activity, Cabral noted that “it may not be very prudent to follow a path of structural revenue reductions without ensuring controlled expenditure.”
In the report released today, the Public Finance Council (CFP) maintained the estimate of a nil budget balance this year and projected a deficit of 0.6% of GDP in 2026, down from the 1% forecasted in April.
Additionally, the organization lowered the projection for economic growth to 1.9% for this year and 1.8% for the next.
