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Central Bank data shows increase in gross and net debt in May, while nominal interest totals R$ 107.5 billion and public sector primary deficit exceeds Reuters projection
The gross debt of Brazil rose to 81.1% of GDP in May, above the 80.2% recorded in April and also above the 80.7% projection indicated in a Reuters survey. The data released by the Central Bank on Tuesday also shows a primary deficit worse than expected and a strong impact of interest rates.
Brazil’s gross debt advances in May
The gross public debt as a proportion of GDP closed May at 81.1%, according to the Central Bank. The result represents an increase of 0.9 percentage points compared to the previous month.
The net public sector debt also rose, going from 67.2% to 67.9% of GDP. In this case, the number was below Reuters’ expectation, which was 68.1%.
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According to the International Monetary Fund’s metric, the gross debt reached 94.3% of GDP in May, compared to 92.9% in April. This calculation includes all Treasury securities, unlike the Central Bank’s methodology.
Interest totals R$ 107.5 billion in the month
Nominal interest payments reached R$ 107.547 billion in May. In the 12-month accumulated, this account reached 8.48% of GDP.
This is the highest level since February 2016, a period when Brazil was facing a severe economic recession, according to the base material.
The high interest rate appears as one of the factors associated with the increase in indebtedness and the greater weight of financial expenses in the public sector.
Primary deficit worse than projection
The consolidated public sector recorded a primary deficit of R$ 56.131 billion in May. The result was above the negative balance of R$ 53.5 billion expected by economists consulted by Reuters.
The central government accounted for most of the shortfall, with a deficit of R$ 55.169 billion. States and municipalities had a deficit of R$ 1.236 billion.
State-owned companies, on the other hand, recorded a surplus of R$ 273 million in the period, according to Central Bank data.
Indebtedness remains above the average of emerging markets
Brazilian indebtedness remains above the average of 77.2% of GDP projected by the IMF for emerging and developing economies in 2026.
According to the base material, this difference keeps risk premiums high, as investors demand compensation to finance the increase in government spending amid concerns about fiscal discipline.
This article was prepared based on information from the Central Bank and Reuters, with data, numbers, and statements preserved as per the consulted material.
