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Fiscal rules in Brazil: An analysis of the new fiscal framework

Author

Listed:
  • Fernando de Holanda Barbosa Filho
  • Mario Carvalho

Abstract

This work analyzes the Brazilian fiscal framework and its main rules, with specialattention to the New Fiscal Framework (NAF), a rule sanctioned in 2023 to replace theSpending Cap. Based on the government’s budget restriction, we analyze the mechanismsunderlying Brazilian fiscal rules and their consequences for the sustainability of public debt.The article shows that the new proposed rule slows the adjustment process comparing withthe “ceiling spending rule”. Additionally, we show the fiscal adjustment depends heavily ontax burden increases. JEL Classification: E62; H60; O11.

Suggested Citation

  • Fernando de Holanda Barbosa Filho & Mario Carvalho, 2025. "Fiscal rules in Brazil: An analysis of the new fiscal framework," Brazilian Journal of Political Economy, Center of Political Economy, vol. 45(3), pages 504-515.
    • Handle: RePEc:ekm:repojs:v:45:y:2025:i:3:p:504-515:id:2517
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    File URL: https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/2517/2445
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    More about this item

    Keywords

    Fiscal rules; new fiscal framework; fiscal sustainability; public finance; public debt;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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