Brazil’s National Treasury projects that gross public debt could rise to 91.5% of GDP by 2036 if the country does not generate surpluses. By contrast, raising the public accounts balance to a surplus of 0.5% of GDP over the next 10 years would lower debt from 86.3% to 81.1% of GDP, according to simulations in a Finance Ministry fiscal risks report published Tuesday after the elections.
The Treasury said the projections underscore the need for structural reforms to improve the business environment and support faster economic growth, helping reduce the debt-to-GDP ratio over the medium term. The report described structural changes to the macroeconomic and fiscal outlook as important over its 10-year forecast horizon.
The report projects gross debt at 83.7% of GDP at the end of this year, up 5.1 percentage points from 2025. It is expected to keep rising through 2030, when it would reach 89.7% of GDP, driven mainly by the effect of interest costs. The estimate is unchanged from the projection in the 2027 draft budget, although the government has since adopted further fiscal measures affecting the budget.
Between 2026 and 2030, interest costs are expected to add 8.4 percentage points of GDP to public debt each year. Economic growth is projected to offset 6 percentage points annually, according to the Treasury.
The report was released as Finance Minister Dario Durigan said the federal government was preparing a gradual fiscal adjustment intended to respect campaign commitments while improving public finances. Durigan has advocated tighter limits on the growth of mandatory spending and suggested lowering the current cap on real spending growth from 2.5% to as much as 1.5%.
The Treasury also flagged the possibility that financially troubled state-owned companies may need emergency government support, adding pressure to federal accounts. Brazil’s 2027 budget proposal includes R$6 billion to recapitalize the postal service, Correios, which is facing a financial crisis. The provision follows a commitment by the federal government under a R$12 billion loan the company signed with five banks in December 2025; the agreement requires a minimum capital contribution by the end of 2027.
The report also cited Eletronuclear’s worsening financial position, linked to costs associated with the Angra 3 project and tariff revenue that is insufficient to fully cover the operation of Angra 1 and Angra 2. The company could also pose a risk to public finances in coming years.
In more favorable scenarios combining fiscal improvement with stronger growth and lower interest rates, the Treasury sees debt falling to 71.3% of GDP. In a more adverse case, with prolonged deficits, weak growth and high interest rates, gross general government debt could rise to 103.4% of GDP.
Sources: Folha Mercado.