Brazil’s net government debt remained stable in March at US$ 481.83 billion (R$ 1.021 trillion). This amount is equivalent to 51.7% of the Gross Domestic Product (GDP), the sum of all wealth produced in the country.
This debt/GDP ratio represents a slight improvement from the month before, when it stood at 51.8%, according to the head of the Economic Department of the Central Bank, Altamir Lopes, in Wednesday’s, April 26, presentation of the March report on Fiscal Policy.
Lopes remarked that several factors contributed to reverse the 0.3 percentage point rise that occurred in this ratio in the first two months of the year.
The first was the primary surplus (money saved by the government to cover interest owed on government debt), which exceeded debt interest payments by US$ 134.97 million (R$ 286 million).
This was reinforced by the 7.2% appreciation of the real in relation to the US dollar and the consequent valorization of the GDP itself.
On the other hand, when the numerator is expressed in terms of the gross debt of the general government – which includes the National Social Security Institute (INSS) and state and municipal governments – the debt/GDP ratio swelled instead of shrinking.
Total debt, which amounted to US$ 696.08 billion (R$ 1.475 trillion) in February (74.9% of the GDP), increased to US$ 703.16 billion (R$ 1.490 trillion) in March (75.4% of the GDP). The increase was due mainly to the incorporation of interest payments into the debt stock.
The Fiscal Policy report shows that the financial obligations of the federal government, expressed in terms of outstanding titles in the hands of the public, rose US$ 5.19 billion (R$ 11 billion) in March in relation to February.
Despite the fact that the government redeemed US$ 1.46 billion (R$ 3.1 billion) more in titles than it issued, debt interest tipped the scales at US$ 6.65 billion (R$ 14.1 billion).