The Independent Fiscal Institution, a body linked to the Senate, revised economic projections for Brazil and now estimates that the government's gross debt will reach 100% of the Gross Domestic Product in 2024. In June, the organization forecasted it would reach this level in 2022.
Despite the improvement in indicator estimates, the agency's Fiscal Monitoring Report, released on Monday (16), states that the public debt trajectory is still "very worrying," with the need for strong fiscal adjustment.
"There is currently no horizon for balancing the debt - GDP ratio. This is what generates more apprehension among economic agents. If you do not have a horizon of the level that the debt will [arrive] and when it will stabilize, the cost of making new debt is higher, there is no way", said IFI's executive director, Felipe Salto.
After a strong rise in government spending and loss of revenue due to the pandemic of the novel coronavirus, the general government's gross debt today stands at 90.6% of GDP. In December 2019, it was 75.8% of the GDP.
Translated by Kiratiana Freelon