Brazil's debt could reach 105% of GDP without deals

Brazil's public debt could reach 105% of GDP if the government of President Luiz Inácio Lula da Silva fails to secure fiscal agreements with Congress, according to Bloomberg Línea.

The warning comes against a backdrop in which Brazil's public accounts have been on an upward trajectory in recent years. According to World Bank data, central government debt stood at 79.1% of GDP in 2022, rose to 83.0% of GDP in 2023 and closed at 81.9% of GDP in 2024.

For its part, the International Monetary Fund (IMF) projects real GDP growth for Brazil of 1.9% in 2026 and 2.0% in 2027, after growth rates of 3.2% in 2023, 3.4% in 2024 and 2.3% in 2025, according to the international agency's estimates.

Legislative consensus is key to containing the expansion of indebtedness and preventing Brazil's economy from reaching critical levels of financial obligations to its creditors.