Brazil’s federal public debt reached R$7.316 trillion ($1.177 trillion) by the end of 2024, reflecting a 1.55% rise in December alone, according to the National Treasury.
This marked a 12.2% increase from 2023’s R$6.520 trillion ($1.051 trillion), underscoring the country’s ongoing fiscal challenges. Projections for 2025 suggest the debt could climb further, potentially reaching R$8.5 trillion ($1.371 trillion).
This increase comes as Brazil continues to navigate high borrowing costs and structural economic imbalances. The domestic debt component rose to R$6.967 trillion ($1.122 trillion), while external debt reached R$349 billion ($56 billion).
These figures align with the Treasury’s target range of R$7 trillion ($1.129 trillion) to R$7.4 trillion ($1.194 trillion) for 2024 but highlight mounting pressures on public finances.
High interest rates have played a central role in this surge. With the Selic rate at 13.25% by year-end, debt servicing costs have escalated, accounting for a significant portion of the increase.
The rising debt-to-GDP ratio, which reached approximately 80% in 2024 and is forecasted to hit 86% by 2026, signals growing concerns about fiscal sustainability. This trend poses risks for investors and policymakers alike.
Higher borrowing costs deter investment while limiting the government’s ability to implement growth-focused policies. Despite modest GDP growth of 2.8% in 2024, analysts warn that unchecked fiscal imbalances could undermine economic stability.
As Brazil enters 2025, addressing these challenges will require decisive reforms to stabilize public finances and restore investor confidence. This makes it a critical issue for stakeholders across the economic spectrum.