BRASILIA, April 15 (Reuters) -
Brazil's government has set a fiscal target of zero primary deficit for 2025, Finance Minister Fernando Haddad said on Monday, postponing the path for debt stabilization initially planned when new fiscal rules were introduced last year.
The target marks a relaxation from a 2025 surplus of 0.5% of gross domestic product that the government had suggested previously.
An official government announcement was scheduled for 4:30 p.m. local time (1930 GMT), but the minister said in an interview with GloboNews TV that he had decided to confirm the target beforehand as it was leaked to the press earlier on Monday.
Haddad sought to emphasize that despite the looser fiscal target, inflation in Brazil was under control.
"If we grow with inflation within the target, the issue of public debt becomes simpler," he said.
After his remarks, the Brazilian real extended losses and weakened past 5.20 per dollar in spot trading, hitting its lowest levels since October 2023, also affected by strong U.S. data and tensions in the Middle East.
Haddad said the "challenging" international scenario was weighing on the Brazilian currency, but that things would go "back to normal" soon.
When President Luiz Inacio Lula da Silva's administration introduced a fresh fiscal framework last year, constraining spending growth to 70% of revenue increases while permitting a minimum expansion of 0.6% and a maximum of 2.5% above inflation annually, it mandated the pursuit of primary budget targets alongside these regulations.
The government had established a target to erase the primary deficit this year, indicating that it would then seek a surplus of 0.5% of GDP in 2025 and 1% of GDP in 2026.
The left-wing government also established a range for achieving the fiscal target, which, starting this year, has a tolerance margin of 0.25 percentage point on either side. (Reporting by Marcela Ayres; editing by Gabriel Araujo and Leslie Adler)
