R$ 11.1 trillion. That is the size of Brazil's public sector gross debt in September, equal to 82.9% of GDP (gross domestic product, the sum of everything the country produces), the Central Bank reported on Thursday (29). It is the highest level since March 2021, at the height of the Covid-19 pandemic. In practice, it is as if a family owed 83% of everything it earns in a whole year.

The same report showed a primary deficit of R$ 5.5 billion in September for the consolidated public sector, which covers the federal government, states, municipalities and state-owned companies. The shortfall is smaller than the R$ 17.5 billion recorded in September 2025. Only the federal government posted a positive balance, of R$ 3.5 billion; states and municipalities were R$ 5.6 billion in the red, and state companies, R$ 3.4 billion.

What it means: a primary deficit happens when the government collects less in taxes than it spends, before counting interest on the debt. Once interest is added, the picture gets much worse. In September, the nominal deficit, which includes that cost, reached R$ 113 billion.

Interest payments alone cost the public sector R$ 107.5 billion in September, nearly 20 times the month's primary deficit, up from R$ 84.7 billion a year earlier, according to Folha de S.Paulo. Over 12 months, the bill adds up to R$ 1.2 trillion, or 8.99% of GDP. That is money that does not go to health, education or public works.

The high interest bill is tied to the Selic, Brazil's benchmark interest rate, now at 13.75% a year. So far this year, the primary deficit totals R$ 94.3 billion (0.93% of GDP), worse than the R$ 79.2 billion of the same period in 2025. The government's target for 2026 is to close the year with a shortfall of 0.25% of GDP, about R$ 34.3 billion.

Debt climbs under Lula

Since December 2022, before Luiz Inácio Lula da Silva took office for his third term, gross debt has risen 11.2 percentage points, from 71.7% of GDP. This year alone, it has climbed 4.3 points. Under the IMF (International Monetary Fund) methodology, which includes public bonds held by the Central Bank, Brazil's indebtedness reaches 95.2% of GDP, above the average of emerging economies and the Eurozone.

Folha estimates at R$ 290 billion the cost of measures adopted by the government with an eye on the elections, considering amounts planned for 2026 and 2027. Economists heard by the newspaper see the need for a fiscal adjustment of at least R$ 250 billion in the next term to stabilize the debt. Facing the rising indebtedness, the economic team is already signaling new containment measures for the next administration, which starts in 2027, according to G1.