Brazil spent more on public-debt interest as a share of its economy than any other G20 country in 2024, according to Financial Stability Board data compiled by Poder360.
The country paid interest equivalent to 8.8% of gross domestic product last year, up from 5.8% in 2023. The three-percentage-point increase was the second-largest rise among the countries analyzed, behind Canada, the outlet reported.
The figures underline a central problem in Brazil’s public finances: the country does not have the world’s largest debt burden, but it pays unusually high rates to finance it. Under the FSB methodology cited by Poder360, Brazil’s gross public debt stood at 88% of GDP, the eighth-highest level in the G20. Brazil’s own central bank uses a narrower measure, which placed gross general government debt at 81.1% of GDP in its latest data.
Japan is often used in Brazilian political debate as a comparison because its public debt is far larger, at about 220% of GDP. President Luiz Inacio Lula da Silva has cited Japan to argue that Brazil’s debt level is not exceptional. But Poder360 noted that Japan spends about 2.5% of GDP on interest, far below Brazil’s level.
Economists quoted by the outlet said the difference lies in the cost of financing. Igor Monteiro, chief executive of EqSeed, said developed economies such as Japan and the United States can carry much higher debt because they borrow at low rates and issue currencies used as international reserves. Brazil lacks those advantages.
Brazil’s benchmark Selic interest rate is 14.25% a year. Poder360 cited a Lev Intelligence and MoneYou survey saying Brazil has the highest real interest rate in the world. High rates make it more expensive for the Treasury to issue new debt and roll over existing obligations.
Willian Andrade, chief investment officer at Kaya Asset Management, told Poder360 that Brazil has “one of the most expensive debts in the world,” as investors demand a premium for fiscal, inflation and institutional risks. Luciano Carvalho, chief executive of Moneycorp, attributed the high cost to the combination of elevated real rates and restrictive monetary policy aimed at bringing inflation under control.
The structure of Brazil’s debt also amplifies the effect. A significant share of Treasury bonds is linked either to the Selic rate or to inflation indexes. When interest rates rise, the cost of servicing that debt adjusts quickly.
Fiscal deficits add another layer of pressure. When the government spends more than it collects before interest payments, it must issue more debt. If investors believe the debt path is worsening, they demand higher returns, which further raises the government’s interest bill.
Brazil’s Independent Fiscal Institution, a Senate-linked watchdog known as the IFI, projects that gross debt could reach 115% of GDP in 2036 without structural changes to public accounts. According to the institution, Brazil would need a primary surplus of 2.1% of GDP to stabilize the debt-to-GDP ratio. In its most optimistic scenario, that result would only be reached after 2029.
This is single-source reporting based on Poder360’s compilation of FSB data and interviews with market economists. The next president, who takes office in 2027, will face pressure to contain mandatory spending tied to the minimum wage, including pensions, unemployment insurance and the BPC cash-transfer benefit for elderly and disabled low-income Brazilians, while preserving room for public investment.