Brazil Projects Heavier Debt Load as Haddad Puts 2025 Deficit at 0.1% Within Target Band

Overview

• Finance Minister Fernando Haddad said preliminary calculations show a 2025 primary deficit near 0.1% of GDP under the regular fiscal accounting, or about 0.48% when precatórios and other exceptional items are included.
• The Treasury now expects primary deficits of 0.2% of GDP in 2026 and 2027, with a return to surplus only in 2028 at 0.3%.
• Gross public debt is projected at 83.6% of GDP in 2026 and to peak at about 88.6% in 2032 in the reference scenario, with adverse paths reaching roughly 95.4% by 2035.
• Excluded judicial payments are forecast at R$57.8 billion in 2026 and R$96.1 billion in 2027, peaking at about R$98.7 billion in 2028 before a phased reincorporation brings them fully back into the target by 2036.
• The report notes that extra revenue measures will likely be required to meet the phased goals in the 2026 LDO, while Haddad emphasized that high real interest rates are the main source of pressure on debt dynamics.