Brazil Cuts Own Flesh to Pay Interest on Close to Half a Trillion Dollars Debt

Brazil government’s debt rose in August from US$ 430.279 billion (971.7 billion reais) to US$ 431.120 billion (973.6 billion reais), equivalent to 51.7% of the GDP (Gross Domestic Product, the sum of all wealth produced in the country).

This percentage indicates the country’s degree of indebtedness, which remains at the same level as in December, 2004.


The government is determined to lower the debt/GDP ratio and has a target of 51.5% for the end of the year. The data are drawn from a Central Bank (BC) report released Monday, September 26.


Altamir Lopes, an economist at the Banco Central, pointed out that interest payments in August amounted to US$ 5.933 billion (R$ 13.4 billion).


This represents US$ 1.416 billion (3.2 billion reais) more than the quantity set aside for debt payments in August: US$ 4.516 billion (10.2 billion reais).


The quantity set aside was obtained through spending cuts, of which the federal government was responsible for US$ 1.992 billion (4.5 billion reais); state and municipal governments, US$ 1.062 billion (2.4 billion reais); and State enterprises, US$ 1.461 billion (3.3 billion reais).


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