Brazil's Federal Government Paid R$11.08 Billion to Honor State and Municipal Debt Guarantees in 2025

Overview

• Rio de Janeiro, Minas Gerais and Rio Grande do Sul accounted for most of the outlays, with R$4.69 billion, R$3.55 billion and R$1.59 billion, respectively, according to the Treasury’s January 15 report.
• In December alone, the Union disbursed R$1.48 billion, including R$643.96 million for Rio de Janeiro and R$626.19 million for Minas Gerais, with smaller amounts for Goiás and other entities.
• Since 2016, the Union has paid R$86.52 billion on guaranteed debts of states and municipalities and recovered about R$5.9 billion.
• Many payments involve states under the Fiscal Recovery Regime, which suspends counterguarantee executions and allows refinancing over up to 360 months, contributing to slow and limited recoveries.
• Goiás and Minas Gerais exited the RRF by joining the Propag program under LC 212/2025, while Rio de Janeiro and Rio Grande do Sul remain in the regime, and some recovery actions face court injunctions that block FPE/FPM withholdings.