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Brazil Appears As Sixth Most Indebted Economy In Latin America According To The IMF With A Projected Gross Debt Of 92 Percent Of GDP Above The Regional Average Of 71 Percent And Behind Only Venezuela Dominica Barbados St. Vincent Bolivia While BC Data Also Shows Increasing Indebtedness.
The Brazil has officially joined the group of the most indebted economies in Latin America and the Caribbean, according to updated projections from the International Monetary Fund. The institution estimates that the gross debt of the Brazilian general government will reach about 92 percent of GDP in 2025, a level that consolidates the country in the sixth position of the regional debt ranking.
In practice, this means that Brazil already owes more than the average of its Latin American neighbors, estimated at around 71 percent of GDP, and only falls behind countries with much more acute fiscal imbalances, such as Venezuela, Dominica, Barbados, St. Vincent and the Grenadines, and Bolivia. The figures reinforce the perception that the trajectory of Brazilian debt remains pressured, even in a scenario of expenditure review and discussion about fiscal rules.
Brazil In Sixth Place In The Latin American Debt Ranking
According to the IMF’s survey, Brazil is the sixth most indebted economy in Latin America and the Caribbean when comparing gross debt to the size of the projected GDP for 2025.
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The list is led by Venezuela, with debt estimated at 138.46 percent of GDP, followed by Dominica, with 97.78 percent, and Barbados, with 97.73 percent.
Right after are St. Vincent and the Grenadines, with 93.55 percent, and Bolivia, with 92.40 percent of GDP. Next comes Brazil, with 92.04 percent, ranking sixth.
Behind the country are economies like El Salvador, Suriname, the Bahamas, and Saint Lucia, all with debt levels lower than Brazil’s.
By significantly exceeding the regional average of around 71 percent, Brazil consolidates itself among the most leveraged economies on the continent, even without being in a situation of acute crisis like some neighbors.
This data serves as a warning signal for investors, the government, and the market, as it limits the maneuvering room for public policies and increases sensitivity to interest rate or economic growth shocks.
How The IMF Calculates Brazil’s Debt
The number published by the IMF for Brazil follows the GFSM 2014 standard, the Government Finance Statistics Manual, a global manual for fiscal statistics. This method adopts a broad concept of general government gross debt and seeks to harmonize measurement practices among different countries.
In the Fund’s methodology, all relevant liabilities of the general government are included, which encompasses:
- public bonds issued by the Treasury
- loans contracted by the public sector
- accounts payable and other financial obligations
By doing this, the IMF reduces the space for national accounting differences to distort international comparisons.
The goal is to ensure that Brazil’s debt figure is comparable to that of other economies in the region, without relative positions being influenced solely by local methodological choices.
This standardization is especially important in regional rankings such as the debt in Latin America, because each government adopts distinct practices when recording, classifying, or excluding certain liabilities.
By applying the same standard, the IMF aims to capture the real risk of indebtedness of Brazil and its neighbors.
What Does The Central Bank Data Say About Brazilian Debt
While the IMF projects the general government debt at around 92 percent of GDP in 2025, the domestic reading from the Central Bank shows the recent evolution of the gross general government debt (GGGD) of Brazil. In October, the GGGD reached 78.6 percent of GDP, an increase of 0.6 percentage point compared to September.
The movement was mainly driven by interest accrual, which added 0.9 percentage point to the debt that month. In the opposite direction, the decline in nominal GDP removed 0.3 percentage point from the debt/GDP ratio. In current values, the stock of GGGD reached about 9.9 trillion reais, accumulating an increase of 2.1 percentage points over the year.
Even below the number projected by the IMF, the Central Bank data indicates that Brazil’s indebtedness continues to trend upwards, pressured by the cost of interest rates and the difficulty of generating robust primary surpluses.
In other words, the country continues to spend more than it collects, and the bill is pushed onto public debt.
Why Do Brazil’s Numbers Diverge Between The IMF And The Central Bank
The difference between the 92 percent of debt projected by the IMF and the 78.6 percent measured by the Central Bank in October does not mean that there is an error on either side. It primarily reflects the difference in concept and scope used to measure Brazil’s debt.
The Central Bank calculates the GGGD, which considers the Union, INSS, states, and municipalities, and follows the methodology for fiscal statistics adopted nationally. This approach has its own cuts, adjusted to the legislation and accounting practices of the Brazilian public sector.
On the other hand, the IMF uses the concept of general government gross debt, which incorporates a broader set of liabilities of Brazil and adjusts the series to allow for standardized comparison with other countries.
This is precisely why the value calculated by the Fund tends to be higher than the Central Bank number, although both point in the same direction: Brazilian indebtedness is high and above the regional average.
In practice, what the two indicators show is convergent. Brazil is seen as a country with high public debt by the standards of emerging economies, which requires constant attention to the balance of public accounts, the design of the fiscal framework, and the government’s ability to generate primary surpluses over time.
What Does This High Indebtedness Mean For The Future Of Brazil
The fact that Brazil is the sixth most indebted economy in Latin America does not, in itself, imply an imminent crisis, but increases the need for fiscal credibility and predictability in public policies.
Very high debts raise the government’s financing costs, put pressure on interest rates, and can reduce the room for investment in areas such as infrastructure, health, and education.
At the same time, the comparison with countries in the region shows that Brazil is still far from more extreme situations, such as those faced by economies experiencing severe fiscal imbalances and difficulties accessing credit.
The challenge, therefore, is not only to reduce debt but to show the market a consistent trajectory that stabilizes the debt/GDP ratio in the medium term.
In summary, both the IMF data and the Central Bank figures converge to a clear diagnosis: Brazil carries a high, growing debt that is above the Latin American average, which makes the agenda of fiscal responsibility and sustainable growth even more central to the economic debate.
Given this situation, in your opinion, should Brazil prioritize spending cuts, revenue increases, or a combination of both measures to reduce public debt in the coming years?
E porque não colocam a dívida do continente todo? Os EUA que são tido como exemplo para alguns, deve muito mais que 100% do PIB
Na minha opinião deveria cortar os gastos com emendas parlamentares e salários acima do teto especificado pela constituição cortar tbm gastos como pé de meia, receber as dívidas dos Estados governado pela direita e melhorar os salários dos aposentados e pensionistas do executivo o FMI não tem muita credibilidade é melhor se basear no BC.