Lula Says Fiscal Target Doesn't Need to Be Zero and Predicts a Difficult 2024

President says he doesn't want a fiscal target that forces him to make cuts in investments


President Luiz Inácio Lula da Silva (PT) stated this Friday (27) that next year's fiscal target doesn't need to be zero. This statement contradicts what was one of the main goals of Minister Fernando Haddad (Finance), who had been resisting the growing skepticism — even within the government — regarding the elimination of the public deficit in 2024. Lula said that this result would hardly be achieved because he does not want to make cuts in investments and projects next year. For the president, a deficit corresponding to 0.5% of GDP (Gross Domestic Product) would be acceptable.

BRASILIA, DF, 27-10-2023 - President Luiz Inacio Lula da Silva at the Planalto Palace (FOTO Gabriela Biló /Folhapress) - Folhapress

"Let me tell you something. Everything we can do to meet the fiscal target, we will do. What I can tell you is that it doesn't need to be zero. We don't need that. I will not establish a fiscal target that forces me to start the year by making billions in cuts in the projects that are priorities in this country," said the president, in response to a question from Folha. The Brazilian stock market plummeted, and the dollar rose after the statements. Futures contract rates also increased.

Lula stated that the market knows that the zero-deficit fiscal target will not be achieved, but investors are greedy.

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