Brazil states project R$36.9B primary deficit in 2026 election year

Brazil's 26 states and Federal District expect an aggregate primary deficit of R$36.9 billion in 2026, reversing surpluses seen since 2022. The shift is driven by accelerated public spending in an election year, with 18 states projecting deficits. This fiscal deterioration could pressure Brazil's overall primary result and complicate federal fiscal targets.