Abstract:"The analysis in this study shows that Brazil’s improved fiscal condition—coupled with rekindled economic growth in the middle of the last decade—enabled sufficient headroom for a shift in fiscal policy as of 2006, giving rise to a period marked by fiscal expansion (Schettini et al. 2011). This shift led to a loosening of the restrictions on state and municipal indebtedness and a reduction in the public administration's primary balance, which changed from a surplus of over 3 per cent of Gross Domestic Product (GDP) into a deficit of 0.59 per cent of GDP in 2014." (…)