President Luiz Inácio Lula da Silva signed the federal budget for 2026 into law with 26 vetoes, publishing the measure in an extra edition of the Official Gazette. The approved budget sets overall federal spending at about R$6.5 trillion and introduces a string of fiscal limits and safeguards intended to preserve macroeconomic discipline.
Brazil budget 2026: headline figures and fiscal targets
The law fixes that 28% of the combined fiscal and social security budgets will be used exclusively to pay interest on the public debt, a charge equivalent to roughly R$1.82 trillion. The global spending ceiling for the three branches of government was set at approximately R$2.4 trillion.
For 2026 the budget projects a primary surplus of R$34.26 billion, with room for this to reach up to R$68.52 billion. Under the country’s fiscal framework, the statutory target would still be met even with a zero result. The formal fiscal target established in the budget law allows a primary deficit of up to R$6.75 billion.
The law clarifies that investment expenses for the new Growth Acceleration Programme (Novo PAC) up to R$5 billion will be excluded from the deficit calculation. It also specifies that the annual review of the minimum wage must align with consumer inflation as measured by the INPC and the statutory rule of valuation. The minimum wage for 2026 is set at R$1,621 from 1 January.
Parliamentary amendments and spending priorities
Parliamentary amendments in the approved text amount to around R$61 billion to be directed by deputies and senators to projects in states and municipalities. Of this total, approximately R$37.8 billion are impositive amendments, which are mandatory payments. Individual amendments by members of Congress add up to R$26.6 billion while state caucus amendments total R$11.2 billion.
The presidential office also listed categories of expenditure that should not be subject to contingency, including regulatory agency inspection costs, agro-defence, programmes to promote women’s inclusion in the energy transition, and support for education of people with high abilities. The government argued that exempting these items from contingency would reduce flexibility in public financial management.
Major vetoes and legal rationale
Among the 26 vetoes, the president struck down a provision that would have increased the Fundo Partidário, the fund parties use to finance campaign activity and other functions. The presidential message said the increase would have reduced funds available to satisfy the other spending requirements of the Electoral Justice and would breach statutory limits on primary spending.
Another veto prevents payments for amendments tied to projects that lack prior environmental licences or an engineering project. The executive branch said such approvals are essential prerequisites for project execution and that identifying technical or legal impediments allows funds to be redirected to viable initiatives.
The president also vetoed a clause that would have revived unpaid liabilities from 2019–2023, known as restos a pagar. The administration maintained that these amounts are not consistent with the deadline rules for outstanding payables set by the 1986 decree governing restos a pagar.
By signing the budget with targeted vetoes, the government aims to balance parliamentary allocations with legal constraints and fiscal discipline. The measure will shape 2026 spending priorities while setting the terms for political negotiation over implementation in the coming year.
Key Takeaways:
- Brazil budget 2026 signed by President Lula with 26 vetoes, total federal outlay about R$6.5 trillion.
- Around 28% of fiscal and social security budgets earmarked for interest payments, roughly R$1.82 trillion.
- Parliamentary amendments total about R$61 billion, with R$37.8 billion in mandatory impositive amendments.
- Key vetoes include an increase to the Fundo Partidário and payments to projects without environmental licences.
