Brazil interest burden climbs to 9% of GDP, highest since 2016
TLT•Brazil's interest bill reached 8.99% of GDP in the 12 months through September, while the nominal fiscal deficit was 9.51% of GDP. Gross debt stood at 82.9% of GDP.
1. Interest costs rise
Brazil's interest bill rose to 8.99% of GDP in the 12 months through September, its highest level since January 2016, central bank data showed. The public sector's primary deficit was 0.52% of GDP, bringing the nominal fiscal deficit to 9.51%.
2. September fiscal figures
In September, the public sector posted a primary deficit of 5.5 billion reais, against expectations for a 500 million reais surplus, while interest expenses reached 107.5 billion reais. Gross debt was unchanged from August at 82.9% of GDP and has risen 11.3 percentage points since Luiz Inacio Lula da Silva took office in 2023.
3. Debt pressures
Brazil's borrowing costs remain elevated as investors demand a premium amid fiscal uncertainty and expanding mandatory spending. With more government debt linked to the 13.75% Selic rate, public finances are more sensitive to high rates; stabilizing debt growth is a fiscal challenge for Lula's new term.
