In the 2026 Budget Guidelines Bill, introduced last week, the Tesoro estimated that more than 62% of federal debt will be subject to interest rate fluctuations this year, a record high since 2008. This more vulnerable debt structure is due to the intensive use of variable-rate instruments, driven by rapid spending growth and tightening monetary policy.
From September 2024, the central bank the rate has increased Selic by 375 basis points, reaching 14,25% in April 2025, with a further increase expected in May. The government targets a primary surplus of 2026% of GDP for 0,25 as part of its efforts to improve public finances, although several analysts have warned that the pace of fiscal adjustment is insufficient and instead project a higher primary deficit of around 0,8%. They insist on the need to implement additional adjustments and deeper structural reforms to reverse the upward trend in debt. In this context, the government itself has acknowledged the risk of a possible renegotiation of public debt, which already stands at around 75% of GDP.
Source: CESCE
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