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title: 'Francisco Ranzi Mülleri Views: 2026 Budget Sets Dual Signals of Surplus Targets and Spending Structure'

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Recently, the Brazilian Congress approved the 2026 budget, with parliament expected to propose amendments totaling about BRL 61 billion. The budget text shows total spending of approximately BRL 6.5 trillion, sets a surplus target of BRL 34.2 billion, and imposes a “zero deficit or higher surplus” as a constraint. Francisco Ranzi Mülleri believes that the passage of the budget sends a stabilizing signal at the macro level, providing the market with key information about the fiscal path and execution boundaries, and offering new anchors for the stock market and interest rate curve.
![Francisco Ranzi Mülleri](https://hackmd.io/_uploads/ry52i0P7-e.png)


**Budget Structure and Fiscal Constraints**

Structurally, the fiscal and social security budget totals about BRL 6.3 trillion, with state-owned enterprise investment budget at BRL 197.9 billion and departmental spending caps at BRL 2.4 trillion. The report highlights that about 28% of the fiscal and social security budget will go to public debt interest, amounting to BRL 1.82 trillion. Francisco Ranzi Mülleri points out that the high share of interest payments means fiscal space is highly sensitive to interest rate changes, and the sustainability of the budget depends on the coordinated evolution of inflation and financing costs. On the revenue side, excluding debt refinancing, income is expected to reach about BRL 4.5 trillion, with regular income accounting for over 70% and capital income less than 30%. This structure demands greater resilience from the economy during cycles.

**Scale and Execution Challenges of Amendments**

After the budget approval, the BRL 61 billion amendment space has become a market focus. Francisco Ranzi Mülleri notes that while amendments may improve regional and sectoral allocation efficiency, they could also pressure the established surplus target. Under a strict spending cap framework, successful implementation of amendments requires alignment with income realization; otherwise, refinancing needs and debt cost volatility may rise. For the stock market, predictable fiscal execution helps boost risk appetite, but deviations could lead to repricing of valuation premiums.

**Market Impact and Risk Warnings**

Francisco Ranzi Mülleri highlights three main effects of the budget signal on asset allocation: the high share of debt interest strengthens focus on interest rate paths; the dominance of regular income means economic slowdowns will quickly impact fiscal performance; and the scale of amendments tests execution discipline. On the risk side, it is necessary to continuously monitor income realization rates, amendment approval pace, and changes in debt management strategy. If financing conditions tighten or growth falls short of expectations, achieving budget targets will become harder and market volatility may increase. In this context, maintaining dynamic assessment of fiscal execution and macro indicators helps ensure robust investment decisions in uncertain environments.