Brazil’s unbiased Fiscal Establishment (IFI), which studies to the Federal Senate, tasks the nation’s gross public debt will attain about 77.6% of GDP in 2025 and 82.4% in 2026, extending an upward trajectory by means of 2035 except coverage settings change.
The evaluation lands as Brasília grapples with tighter budgets, cussed borrowing prices and slowing momentum in income measures.
The projection is constructed on three shifting elements: recurring main deficits beneath present fiscal guidelines, actual rates of interest close to 5.1%, and common actual GDP progress round 2.2%.
On that math, merely stopping debt from rising would require a main surplus of roughly 2.1% of GDP—considerably stronger than current outcomes. The duty turned more durable after the expiration of Provisional Measure 1,303, which lawmakers pulled from the agenda.
The lapse leaves an estimated R$20 billion hole within the 2026 plan, prompting the federal government to seek for different income or spending offsets.
Congress has signaled resistance to the next tax take, which already hovers round one-third of GDP and has trended upward over the previous three many years.
IFI Flags Acute Fiscal Strain on Federal Funds
IFI describes an “acute fiscal constraint”: obligatory expenditures more and more bind the federal finances; the excessive debt-to-GDP ratio and repeated main deficits crowd out public funding; and curiosity funds soak up a rising share of assets.
Government director Marcus Pestana has warned that public spending faces actual limits and that debt dynamics ought to take into account an intergenerational pact—at the moment’s consumption financed by tomorrow’s taxpayers has penalties that can finally need to be addressed structurally.
There’s additionally a federative angle. States and municipalities, on common, are in a more healthy fiscal place than the Union and have been investing greater than the federal authorities.
Current measures search to handle subnational strains: Complementary Legislation 212/2025 (PROPAG) outlines one other renegotiation of state money owed with the Union, whereas Constitutional Modification 136/2025 caps court-ordered funds (precatórios) for states and municipalities and eases phrases for pension-related arrears.
None of this eliminates the necessity for sustained federal main surpluses. The following markers to look at are the 2026 finances’s primary-balance path, the sturdiness of elevated actual rates of interest, and any substitute package deal to fill the income gap left by MP 1,303.
