In the first year of Luiz Inácio Lula da Silva's (PT) government, the central government accounts had a hole of R$ 230.5 billion ($ 47.4 billion) in 2023, equivalent to 2.12% of the GDP (Gross Domestic Product). This is the worst result since 2020, the year of the Covid-19 pandemic.
The outcome was influenced by the regularization of precatórios, judicial debts that had been postponed by Jair Bolsonaro's (PL) administration. At the end of last year, the Lula government obtained authorization from the Supreme Federal Court (STF) to settle a liability of R$ 92.4 billion ($ 19 billion). Even without precatório payments, the deficit would have been R$ 138.1 billion ($ 28 billion) — equivalent to 1.27% of the GDP and still the worst since 2020.
In this comparison, only Dilma Rousseff's (PT) second term had a worse result in the first year of the administration. In 2015, the hole was R$ 183.1 billion ($ 37 billion) due to the regularization of the so-called fiscal maneuvers. In 2019, the first year of Bolsonaro's administration, the deficit was R$ 122.6 billion ($ 24.7 billion) . The values were adjusted for inflation. The 2023 result was worse than the informal goal set by Minister Fernando Haddad (Finance), who promised to deliver a deficit of up to 1% of the GDP in the first year of the administration.
Even before Lula's inauguration, the government worked in the National Congress to approve a Constitutional Amendment Proposal (PEC) that authorized an increase of up to R$ 168 billion in spending in 2023 to restore budget actions that were constrained by cuts of up to 95%.