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With a Deficit of R$20.17 Million Above Expected, Central Government Sees Revenue Decrease, Expenditures Increase, and Bets on December Surplus to Still Meet the Fiscal Target for 2025.
When the National Treasury confirmed a deficit of R$20.17 million in the central government accounts in November, the result was worse than the market expected and raised an immediate alert about the fiscal trajectory. Economists projected a much smaller shortfall for the month, around R$13.5 billion, and the disappointment with the number reinforced the feeling that the government is pushing the limits to close the year within the target.
At the same time, the government insists that the situation is not out of control. The economic team maintains that, despite the deficit of R$20.17 million in November, the last month of the year should record a robust surplus, primarily supported by revenue from state-owned companies, which would allow ending 2025 with the result within the allowable band of the fiscal target.
The official message is clear: November was a bad snapshot, but the year’s film can still have a positive ending.
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November Ends in the Red and Disappoints the Market
The central government, which includes the National Treasury, Social Security, and the Central Bank, recorded a negative primary result of R$20.172 billion in November, a figure that was well above analysts’ projections.
In practice, this means that revenues were insufficient to cover the month’s primary expenditures, not considering the payment of public debt interest.
This deficit of R$20.17 million, used here as a reference expression for the November result, reinforces the perception of a mismatch between revenues and expenditures at a time when the government has publicly committed to the target of zero deficit for the year.
For the market, the message is that fiscal leeway is small and increasingly depends on extraordinary revenue entries.
Revenue Decrease, Expenditure Increase
On the revenue side, the Treasury recorded net revenues of about R$166.9 billion in November, representing a real decrease of about 4.8 percent compared to the same month of the previous year.
A significant part of this deterioration came from so-called non-managed revenues by the Federal Revenue Service, which fell by more than 50 percent, while managed revenues even grew, but not enough to offset the decline.
On the expenditure side, the picture was the opposite. Total spending reached approximately R$187.1 billion, with a real increase of 4 percent compared to November of last year.
Social security benefits rose by almost 4 percent, driven by both the increase in the number of beneficiaries and adjustments to the minimum wage.
The discretionary expenses of the Executive also increased significantly, with growth exceeding 27 percent, particularly in the health sector.
The combined result was a classic scenario of fiscal tightening: shrinking revenue, rising expenditure, and yet another month in the red.
Bet on December Surplus to Save the Target
Even with the impact of the deficit of R$20.17 million in November, the economic team shows confidence in their ability to close the year with a positive balance in December.
The Treasury Secretary stated that internal numbers indicate a primary surplus of around R$20 billion in the last month of the year, which would offset the shortfall from November and bring the government closer to the center of the fiscal target.
A part of this bet is anchored in dividend revenues from state-owned companies, estimated at around R$13 billion just in December.
The combination of dividends, other atypical revenues, and some spending restraint at year-end is what supports the claim that the episode of the deficit of R$20.17 million in November does not, by itself, compromise the final result for 2025.
In the official view, November is an outlier in a trajectory that can still end positively.
How the Calculation of the Fiscal Target for 2025 Stands
For the year-to-date until November, the central government presents a primary deficit of approximately R$83.8 billion.
In the adjusted reading, which excludes expenses such as court-ordered payments, the number falls to around R$40.4 billion. Over twelve months, the result is still negative, close to R$57.4 billion, equivalent to about 0.47 percent of GDP.
The fiscal target for 2025 is a zero deficit, with a tolerance band of 0.25 percent of GDP, which corresponds to about R$31 billion.
This means that, even with the deficit of R$20.17 million in November, the government can still meet the target if December delivers the expected surplus and if part of the expenses considered outside the target remains indeed excluded from the official calculation.
In practice, the discussion is not just about the nominal number, but about which items are included or excluded from the final account.
What Concerns Economists and Investors
For analysts, the main point of concern is not just the deficit of R$20.17 million in a specific month, but the trend of depending on extraordinary revenues to balance the accounts.
Dividends from state-owned companies, non-recurring revenues, and accounting maneuvers help improve the short-term result but do not solve the structural challenge of balancing permanent expenditures with equally permanent revenues.
There is also concern about the pace of growth of mandatory expenditures, especially Social Security and social spending, in an environment of moderate economic activity and Congress’s resistance to tax increases.
The reading of much of the market is that the fiscal target for 2025 can technically be met, but with very little margin of safety, which keeps the fiscal risk on the radar of investors and rating agencies.
What This Deficit Signals for the Coming Months
The episode of the deficit of R$20.17 million in November serves as a reminder of how tight the government’s room for maneuver is in fiscal policy.
If December confirms the promised surplus and the target is met, the government gains political momentum to defend its economic strategy and argue that the plan is working.
If, on the other hand, the surplus comes in lower than expected or some unexpected factor affects revenue, the combination of weak results with ambitious targets may fuel additional uncertainty regarding interest rates, exchange rates, and the credibility of the fiscal framework.
Among technicians and investors, the message is simple: one bad month does not define the year, but it shows that there is no room for mistakes in such a sensitive environment.
And you, do you think a month with a deficit of R$20.17 million is just an manageable slip or a sign that the fiscal target for 2025 is more talk than practice?
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