New fiscal framework: primary balance targets and a spending limit tied to revenue (Complementary Law 200/2023)
Complementary Law No. 200 of 30 August 2023, the « Sustainable Fiscal Regime » or « arcabouço fiscal », replaces the federal spending cap of Constitutional Amendment 95/2016, which only let primary spending grow with inflation. Each year the budget guidelines law sets a primary balance target for the central government, met within a band of plus or minus 0.25 point of GDP, while primary spending limits grow with inflation plus 70% of real revenue growth (50% if the target was missed), never less than 0.6% nor more than 2.5% in real terms. Missing the target triggers automatic restrictions, and a floor protects public investment. The target was declared met in 2024 and 2025 after legally authorised deductions, while the Federal Court of Accounts and the Senate’s Independent Fiscal Institution judge the effort insufficient to stabilise public debt.
Key points
Central government primary balance, 2025
-0.48% of GDP
2025 · Observed
according to the National Treasury (deficit of R$ 61.7 billion)[13]
0.10% of GDP once the spending authorised to be excluded is left out: the figure used to declare the target met.
Gross general government debt (DBGG)
78.7% of GDP
end of 2025 (76.3% a year earlier) · Observed
Central Bank data, cited by the Federal Court of Accounts (audit of the 2025 accounts)[14]
Maximum real growth of the spending limits
2.5%
per year, since 2024 (minimum 0.6%) · Observed
Complementary Law 200/2023, article 5, § 1[1]
Public sector primary balance (Brazil)
-5.5BBRL
Sep 2026
At a glance
Reference text
Lei Complementar nº 200, de 30 de agosto de 2023 (Complementary Law No. 200 establishing a sustainable fiscal regime to guarantee the country’s macroeconomic stability and create adequate conditions for socio-economic growth, and amending Complementary Law No. 101 of 2000, the Fiscal Responsibility Law)[1]
No. Lei Complementar nº 200/2023 · August 30, 2023
Read the text ↗Carried by
- Luiz Inácio Lula da Silva[2][1]President of the Republic, sent the bill to Congress (Message No. 150/2023, April 2023) and signed the law on 30 August 2023 with a partial veto · 2023 · Initiator
- Fernando Haddad[1][7]Minister of Finance, countersigned Complementary Law 200 and its 2024 tightening (Complementary Law 211) · 2023-2024 · Initiator
- Simone Tebet[3][1]Minister of Planning and Budget, co-signed the interministerial memorandum of the bill (EMI No. 52/2023 MF MPO) and countersigned the law · 2023 · Initiator
- Claudio Cajado[2]Deputy (PP-BA), rapporteur in the Chamber of Deputies; his substitute text was passed by 372 votes to 108 and he reported on the Senate amendments · 2023 · Amendment
- Omar Aziz[4]Senator (PSD-AM), rapporteur in the Economic Affairs Committee and in plenary of the Senate · 2023 · Amendment
- Rogério Ceron[12][13]Secretary of the National Treasury, presents the central government’s results and the verification of the target · 2025-2026 · Implementation
Implementation
- Ministry of Finance and National Treasury Secretariat: budget execution, bimonthly revenue and spending assessments, monthly Treasury results
- Ministry of Planning and Budget: budget guidelines bill (targets) and annual budget bill (spending limits)
- Central Bank of Brazil: official measurement of the primary result and of gross general government debt (article 2, § 4)
- Congress (budget guidelines and budget laws) and Federal Court of Accounts (TCU, audit of the President’s accounts)
Stated objective
Guarantee the country’s macroeconomic stability and create adequate conditions for socio-economic growth, keeping public debt at sustainable levels. The government presents the regime as a way to fund social policies and public investment while tying spending growth to revenue growth, so that spending grows less than revenue; the floor and ceiling on real spending growth are meant to avoid cuts in recessions and to save resources to reduce debt when growth is strong (« an anti-cyclical element »). Primary balance targets with a tolerance band are to bring gross general government debt to a stable ratio to GDP.[1][3]
according to article 1 of the law and the interministerial memorandum of the Ministries of Finance and of Planning and Budget (EMI No. 52/2023, April 2023)
Central government primary balance target announced for 2024
0% of GDP
2024 · according to the Ministry of Finance’s guide to the proposal (2023), band from −0.25% to +0.25% of GDP[11]
Main measures
- Scope and targets (articles 1 and 2): the regime covers the primary revenue and spending of the Union’s fiscal and social security budgets. Each budget guidelines law sets annual primary balance targets for the central government for the coming year and the three following ones, compatible with a sustainable debt path until gross general government debt (DBGG) stabilises as a share of GDP. The Central Bank measures the primary result and the debt ratio.[1]
- Tolerance band (article 11, amending the Fiscal Responsibility Law, from 1 January 2024): the target is met within minus 0.25 and plus 0.25 point of the GDP forecast in the budget guidelines bill, converted into reais. The same annex must present a medium-term fiscal framework and the expected effect of the targets on the debt over ten years.[1]
- Spending limits (articles 3 and 4): individual limits on primary appropriations for the executive, the judiciary, the legislature, the federal prosecution service and the public defender’s office, based on the 2023 budget for 2024, then adjusted each year by IPCA inflation over the twelve months to June plus the real growth allowed by article 5. Constitutional transfers to states and municipalities, the federal top-up to the Fundeb education fund, extraordinary credits and other listed items are outside the limits.[1]
- Real growth of the limits (article 5): 70% of the real growth of central government primary revenue if the previous year’s target was met, 50% if it was missed, never less than 0.6% nor more than 2.5% a year. Revenue is measured over the twelve months to June, excluding concessions, dividends, natural resource revenue and new special debt-settlement programmes.[1][3]
- Adjustment measures (articles 6 to 8): a result below the lower bound triggers part of the prohibitions of article 167-A of the Constitution until the next measurement, and all of them after a second consecutive miss; they also apply when mandatory spending exceeds 95% of primary spending under the limits. Minimum wage increases under the valorisation law are exempt. Missing the floor is not an infringement of the Fiscal Responsibility Law if the official froze commitments while preserving at least 75% of authorised discretionary spending.[1]
- Investment (articles 9 and 10): budgeted investment may not be lower than 0.6% of the GDP estimated in the budget bill (housing programmes included); a result above the upper bound may fund extra investment with up to 70% of the excess, capped at 0.25 point of the previous year’s GDP, never when there is a primary deficit.[1]
- Added in December 2024 (Complementary Law 211): new or extended social security benefits must fit within the growth of the limits; a central government primary deficit from 2025, or from the 2027 budget bill a nominal fall in total discretionary spending, bans new tax benefits and caps the real growth of personnel spending at 0.6% until 2030.[7]
- Accountability: the Minister of Finance presents the fulfilment of the targets and the debt path at public hearings in Congress by the end of February, May and September (Fiscal Responsibility Law, article 9, § 4, as amended).[1]
In data
Surplus targets in % of GDP (centre of the ±0.25 point band), 2024-2028
| Year | Announced with the proposal (2023) | Target set by the budget guidelines law |
|---|---|---|
| 2024 (Result for the target: deficit of 0.09% of GDP (0.36% before excluded spending).) | 0% of GDP | 0% of GDP |
| 2025 (Result for the target: deficit of 0.10% of GDP (0.48% before excluded spending).) | 0.5% of GDP | 0% of GDP |
| 2026 | 1% of GDP | 0.25% of GDP |
| 2027 (Indicative target in the 2026 budget guidelines law.) | – | 0.5% of GDP |
| 2028 (Indicative target in the 2026 budget guidelines law.) | – | 1% of GDP |
Scale starts at 0% of GDP · Targets apply to the central government (Treasury, social security, Central Bank); results are those used to check the target, after the spending the law allows to exclude.
Public sector primary balance (Brazil)
-5.5BBRL
Sep 2026
The Central Bank’s monthly primary result covers the whole consolidated public sector (states, municipalities and state companies included), a wider scope than the central government target of the framework.
Public debt
93.3% GDP
2025
Stabilising debt as a share of GDP is the stated anchor. This card reads the IMF’s general government gross debt, which differs in method from the Central Bank’s DBGG used by the law.
Budget balance
-7.4% GDP
2025
The overall balance includes interest payments, which the primary target leaves out.
Timeline
Constitutional Amendment 95: the spending cap (« teto de gastos ») for twenty years[5]
The « New Fiscal Regime » set, for twenty financial years, individual limits on federal primary spending: 2016 spending plus 7.2% for 2017, then the previous limit adjusted only by consumer price inflation (IPCA) over the twelve months to June.
Constitutional Amendment 126 orders a new fiscal regime by complementary law[6]
The President must send a complementary law bill establishing a sustainable fiscal regime by 31 August 2023; the articles of the spending cap are repealed once that law is signed.
Chamber of Deputies passes the rapporteur’s substitute text (372 votes to 108)[2][1]
Under an urgency procedure, the plenary adopts Claudio Cajado’s substitute text and the final wording, and sends the bill to the Senate. A request by the PSOL-REDE federation to delete chapter V on adjustment measures does not succeed: the chapter is in the law.
Senate passes the bill with amendments (57 votes to 17)[4]
The Economic Affairs Committee approves Omar Aziz’s report by 19 votes to 6 in the morning; the plenary passes the bill the same day and returns it to the Chamber.
Congress overrides the partial veto[2][1]
The vetoed provisions are promulgated in the Diário Oficial da União on 22 December 2023, among them a rule added to the Fiscal Responsibility Law: the budget guidelines law may not exclude any primary expenditure from the measurement of the primary balance target.
Complementary Law 211 tightens the framework[7]
It adds three articles: new or extended social security benefits must fit within the growth of the spending limit; from 2025, a central government primary deficit bans new tax benefits and, until 2030, caps the real growth of personnel spending at 0.6% in the following year; from the 2027 budget bill, the same bans apply when total discretionary spending falls in nominal terms. It also repeals Complementary Law 207 of May 2024.
2024 target declared met: deficit of 0.09% of GDP after excluded spending[12]
The Treasury reports a central government primary deficit of R$ 11.0 billion for the target, against a zero target whose floor was a deficit of R$ 27.7 billion; R$ 32 billion, mostly extraordinary aid to Rio Grande do Sul after the floods, was excluded. Including it, the deficit is R$ 43.0 billion (0.36% of GDP), against R$ 228.5 billion in 2023.
Supreme Federal Court: the judiciary’s own revenues are outside the limits[1]
In ADI 7641, the Court gives article 3 an interpretation consistent with the Constitution that excludes from the spending limits the federal courts’ own revenues financing their specific activities.
Two new exclusions: strategic defence projects and temporary education and health spending[8][9]
Complementary Law 221 (18 November 2025) lets the executive deduct strategic defence projects, up to R$ 5 billion a year for six years, from the target and the spending limit; Complementary Law 223 (19 December 2025) excludes from both, from 2025, the temporary education and health spending of Law 15.164/2025.
Congress passes the 2026 budget guidelines: surplus target of 0.25% of GDP[15]
The target is a surplus of R$ 34.3 billion, met between zero and 0.5% of GDP; the text allows the government to aim at the lower bound when it has to freeze spending. It projects surpluses of 0.5% of GDP in 2027 and 1% in 2028, and a spending limit of R$ 2.43 trillion for 2026.
2025 target declared met: deficit of 0.10% of GDP after excluded spending[13][14]
The Treasury reports a central government primary deficit of R$ 61.7 billion (0.48% of GDP), reduced to R$ 13 billion (0.10% of GDP) once the spending authorised to be left out is excluded: court-ordered payments above the former ceiling of Amendment 114/2021, refunds of undue deductions from social security benefits and strategic defence projects. In its audit of the 2025 accounts, the Federal Court of Accounts, using the Central Bank figures, finds a deficit of R$ 58.7 billion, R$ 10.0 billion after R$ 48.7 billion of deductions, inside the band whose floor was R$ 31.0 billion.
Complementary Law 229: carve-outs for 2026[10]
Bills on paternity leave and pay are exempted from the article added in 2024 that caps the growth of new social security benefits, and some 2026 tax benefits are exempted from the bans of the 2026 budget guidelines law and of article 14-A of the Fiscal Responsibility Law.
Independent Fiscal Institution: 2026 target to be met only after deductions[16]
In its August 2026 fiscal monitoring report, the IFI and the government both project an effective primary deficit of about 0.4% of GDP in 2026; formal compliance with the target would require deductions of R$ 62.8 billion (government) or R$ 69.8 billion (IFI) and the use of the tolerance band. The IFI estimates the structural deficit at 1.4% of GDP up to the second quarter of 2026, against 0.7% a year earlier.
- Upcoming: the outcome is not known
Measurement of the 2026 result against the 0.25% of GDP surplus target[1][7]
The Central Bank measures the central government’s 2026 primary result. If it falls below the lower bound of the band, spending growth is limited to 50% of revenue growth in the next budget and part of the restrictions of article 167-A of the Constitution apply; a primary deficit also triggers the bans added in 2024.
The debate
Citoyen takes no position: arguments are reported as their authors put them.
According to its supporters
- The government argues that tying spending to revenue makes the rule anti-cyclical: the 0.6% floor avoids cutting spending in recessions, when revenue falls, and the 2.5% ceiling saves resources to reduce debt when growth is strong, while protecting social policies and public investment.[3][11]
- According to the Ministry of Finance, the spending cap of Amendment 95 was too rigid: it had not been complied with since 2019, was amended several times by constitutional amendment and encouraged tax breaks; the new regime combines credibility with flexibility and replaces criminal sanctions with economic and political incentives.[11]
- The National Treasury points to the results: the 2024 deficit fell 81.7% in real terms from 2023, the targets for 2024 and 2025 were met, and for Treasury Secretary Rogério Ceron the recovery of the public accounts’ balance is « unequivocal ».[12][13]
According to its opponents
- The Federal Court of Accounts finds that the 2025 target was met thanks to exceptional deductions and to the use of the lower bound of the band, with an effort materially insufficient to stabilise debt: it estimates the stabilising surplus at 1.94% of GDP, a gap of about 2.4 points.[14]
- The Senate’s Independent Fiscal Institution notes that spending again grows faster than revenue, that the 2026 target can only be met formally after tens of billions of reais of deductions, and that its estimate of the structural deficit doubled in a year, to 1.4% of GDP.[16]
- Deputy Kim Kataguiri (União-SP) criticised the 2026 budget guidelines for letting the government aim at the floor of the band rather than its centre, leaving « no margin » for the unexpected.[15]
- From the left, the PSOL-REDE federation asked the Chamber to delete the chapter on adjustment measures, the automatic restrictions triggered when the target is missed; the request did not succeed.[2][1]
Indicators to watch
- Public sector primary balance (monthly) · Banco Central do BrasilSee the card →
- Public debt, % of GDP · FMISee the card →
- Budget balance, % of GDP · FMISee the card →
- Central government primary result and result for the target (monthly Treasury results, RTN) · Tesouro Nacionalno Citoyen card yet
- Gross general government debt (DBGG), % of GDP · Banco Central do Brasilno Citoyen card yet
- Structural primary balance · IFI (Senado Federal)no Citoyen card yet
Sources
- [1]Lei Complementar nº 200, de 30 de agosto de 2023 (texto atual, com alterações e decisões judiciais) –Senado Federal / Câmara dos Deputados, normas.leg.br, August 30, 2023
- [2]PLP 93/2023: ficha de tramitação –Câmara dos Deputados
- [3]Projeto de Lei Complementar n. 93/2023 e Exposição de Motivos Interministerial EMI nº 00052/2023 MF MPO (inteiro teor) –Câmara dos Deputados / Ministério da Fazenda / Ministério do Planejamento e Orçamento, April 18, 2023
- [4]PLP 93/2023 (Novo arcabouço fiscal): tramitação no Senado Federal –Senado Federal
- [5]Emenda Constitucional nº 95, de 15 de dezembro de 2016 (Novo Regime Fiscal) –Senado Federal / Câmara dos Deputados, normas.leg.br, December 15, 2016
- [6]Emenda Constitucional nº 126, de 21 de dezembro de 2022 –Senado Federal / Câmara dos Deputados, normas.leg.br, December 21, 2022
- [7]Lei Complementar nº 211, de 30 de dezembro de 2024 –Senado Federal / Câmara dos Deputados, normas.leg.br, December 30, 2024
- [8]Lei Complementar nº 221, de 18 de novembro de 2025 (projetos estratégicos em defesa nacional) –Senado Federal / Câmara dos Deputados, normas.leg.br, November 18, 2025
- [9]Lei Complementar nº 223, de 19 de dezembro de 2025 –Senado Federal / Câmara dos Deputados, normas.leg.br, December 19, 2025
- [10]Lei Complementar nº 229, de 30 de março de 2026 –Senado Federal / Câmara dos Deputados, normas.leg.br, March 30, 2026
- [11]Cartilha: para entender a proposta do Governo de Regime Fiscal Sustentável –Ministério da Fazenda, Secretaria de Política Econômica, 2023
- [12]Governo Central conclui 2024 com déficit primário de R$ 11 bilhões, cumprindo a meta fiscal –Ministério da Fazenda, January 31, 2025
- [13]Governo Central cumpre com folga a meta fiscal estabelecida para 2025, aponta relatório do Tesouro –Ministério da Fazenda, January 30, 2026
- [14]Contas do Presidente 2025: principais achados de auditoria –Tribunal de Contas da União, 2026
- [15]Congresso aprova Lei de Diretrizes Orçamentárias de 2026 com meta de superávit –Câmara dos Deputados, Agência Câmara de Notícias, December 4, 2025
- [16]Despesas voltam a crescer em ritmo maior que as receitas e déficit primário se mantém (Relatório de Acompanhamento Fiscal nº 115) –Instituição Fiscal Independente, Senado Federal, August 20, 2026