Brazil's Lula government plans measures to raise fiscal adjustment target to $14 billion

According to people familiar with the matter, facing investor concerns over rising public debt, Brazilian President Lula's government is preparing additional budget measures aimed at improving next year's fiscal position and further consolidating public finances. The proposals under review are intended to cut spending currently excluded from Brazil's fiscal targets and to limit certain mandatory expenditures, the people said. Combined with measures already submitted to Congress this week, the proposals could raise the expected scale of fiscal adjustment for 2027 to about 80 billion reais. The people requested anonymity because the discussions are confidential. They said the Lula government plans to include the measures in a proposed constitutional amendment and aims to submit it to Congress by the end of this year. The move would supplement a plan announced by the government on Wednesday, when it submitted a legislative proposal seeking to cut spending by 50 billion to 60 billion reais in 2027. Following the news, the Brazilian real pared its losses at one point, while the rise in swap rates also eased.