Mato Grosso Government Implements Spending Cuts Amid Adverse Economic Scenario

The Bottom Line

• Mato Grosso state initiated spending cuts due to adverse economic conditions, including historically high interest rates and declining revenues.
• The measures, mandated by Governor Otaviano Pivetta, aim for precautionary adjustments across the state administration.
• State revenue data shows a deceleration in recent years, with a significant decline of R$3.4 billion in Q1 2026.

The government of Mato Grosso has commenced a process of expenditure containment, citing an adverse economic scenario. This information was confirmed by Mauro Carvalho, Chief Secretary of the Civil House, who stated that Governor Otaviano Pivetta (Republicanos) mandated “precautionary adjustments” across the entire state administrative structure.

These directives were communicated last month to secretaries, presidents of autarchies, and leaders of direct and indirect administration bodies, shortly after Pivetta officially assumed command of the state, succeeding former Governor Mauro Mendes (União Brasil).

Despite the announcement, the government has not yet detailed which areas may experience expenditure reductions, nor has it presented official estimates regarding the financial impact of these measures. “What Governor Otaviano Pivetta has been doing, these adjustments to reduce our expenses, is truly preventing us from things that may happen in the future,” affirmed Mauro Carvalho during an interview yesterday (May 18, 2026).

According to the secretary, the decision was made due to the national and international economic environment, characterized by elevated interest rates, economic deceleration, and a decline in public revenues. “We are in a difficult scenario, with the highest interest rates in the country’s history, a drop in collection, and the Union’s transfers to the state of Mato Grosso have been decreasing,” he declared.

Data from the State Secretariat of Finance (Sefaz-MT) indicates that state revenue has shown retraction in recent years. In the first two months of 2022, the state’s revenue was R$12.8 billion. In 2023, this figure rose to R$14.1 billion for the same period. However, the subsequent two years recorded a deceleration, with a decline of R$2.8 billion in 2025 and R$3.4 billion in the first two months of this year (2026). In March, Governor Otaviano Pivetta had already expressed concern about the economic outlook.

The proactive fiscal stance by Mato Grosso underscores the broader challenges faced by Brazilian states amidst a tightening monetary policy cycle and a global economic slowdown. While specific details on the scope and magnitude of cuts are pending, the move signals a cautious approach to public finance management in response to persistent macroeconomic pressures. The emphasis on “precautionary adjustments” suggests an anticipation of continued fiscal headwinds, potentially impacting public investment and service delivery in the medium term.