The market value of Brazil’s public debt currently exceeds R$7 trillion (approximately US$1.4 trillion), representing approximately 90% of the country’s GDP. This reflects a high level of debt, mainly domestic (approximately 85%) and a smaller portion of external debt. High tax burdens and social spending are important factors contributing to the growth of the debt, and the government faces challenges in balancing its public finances, controlling the fiscal deficit, and ensuring economic sustainability.
However, if fiscal reforms are not adopted to reduce the deficit, increase revenue and control public spending, the risk of a fiscal crisis and, consequently, a deep economic crisis will increase significantly over a 5 to 10-year horizon.