Public Accounts

The path to debt reduction is to consolidate the fiscal adjustment in progress

The General Coordination of Strategic Planning of the Public Debt presented this Wednesday (26/6), after the National Treasury Result Collective, a report with projections for the Brazilian public debt.

The document shows a marked increase in public debt in proportion to GDP, from 51.5% of GDP in 2013 to 80% of GDP in 2019.

The projection shows that, considering the base scenario, the peak of debt growth will be in 2022, when it will reach 82.2% of GDP. In a risk analysis, the 30% of the most favorable scenarios point to a range from 65.1% of debt x GDP in the best scenario to 77.2% in the worst case scenario in 2028.

The document also considers for projections only the implementation of the spending ceiling, that is, does not take into account the possibility of approval of the New Pension and other economic measures.

According to the Coordinator of Strategic Planning for Public Debt, Lena Carvalho, the path to reduce indebtedness to lower levels of debt is to consolidate the ongoing fiscal adjustment.

To reduce the debt-to-GDP ratio to investment grade countries around 50% of GDP, for example, it would be necessary for the country to obtain an additional primary of 2.37% in 2028, in addition to the 2% projected in the base scenario.

Compared with other emerging countries, such as India, Chile, Mexico and Argentina, Brazil is among the most paying interest on the public debt.