n n n ‘. concat(e. i18n. t(“search. voice. recognition_retry”),’n
(Add more data, context)
BRASILIA, Feb 7 (Reuters) –
Brazil’s public debt as a percentage of gross domestic product (GDP) rose to 74. 3% last year, driven by a gigantic interest burden and a strong fiscal expansion that marked the return of the public sector to deficit territory.
According to central bank data released Wednesday, the country’s gross debt, considered an indicator of solvency, rose 2. 7 percent for the year, driven primarily by interest charges.
Due to high borrowing rates, those interest rates amounted to 718. 3 billion reais ($144. 8 billion) for Latin America’s largest economy, 6. 61% of GDP. This is the highest point in 12 months to December since 2015 (8. 37%).
To curb inflation, the central bank maintained the interest rate unchanged for nearly a year at a six-year high of 13.75%, initiating a loosening cycle in August. So far, policymakers have
Rates at 11. 25%
, while annually
Inflation in mid-January
It stands at 4. 47%.
The accumulation of gross debt also affected the public sector’s number one deficit, which reached 249. 1 billion reais ($50. 2 billion) last year, the first deficit since 2020.
This was followed by a December deficit of 129. 573 billion reais, exceeding the expected deficit of 124. 35 billion reais projected in a Reuters poll.
Social spending rose sharply in 2023, the first year of President Luiz Inácio Lula da Silva’s term, while net revenues declined, mainly due to falling commodity prices.
The central government’s deficit for the year, which totaled R$264. 5 billion, also played a role through a disbursement of R$92. 4 billion to
Resolve Court-Ordered Payments
.
In 2021, former President Jair Bolsonaro imposed an annual cap on court-ordered payments, in a default that Lula’s leadership has now addressed.
At the same time, states and municipalities recorded a number one surplus of R$ 17. 7 billion in 2023, particularly lower than last year’s surplus of R$ 64. 9 billion.
State-owned companies posted a 2.3 billion reais primary deficit in 2023, reversing the 6.1 billion reais surplus from a year earlier.
($1 = 4. 9620 reais) (Reporting via Marcela Ayres; editing via Steven Grattan)