Brazil Approves 2026 Budget That Will Strain Its Fiscal Rules

Brazilian lawmakers approved the final budget of President Luiz Inacio Lula da Silva’s term, backing a plan that will ultimately demonstrate just how hard it is for the government to comply with fiscal rules it created three years ago.

Congress voted in favor of Lula’s 2026 budget plan on Friday, maintaining the government’s targeting of a primary fiscal surplus — excluding interest payments — of 0.25% of gross domestic product.

But the goal does not consider billions of reais in spending that will be treated as exceptions to the rule, outlays that when taken into account turn the modest ...