Brazil's gross public debt reached 82.5% of GDP in July, its highest level in over five years, the Central Bank reported on Monday (Aug 31). In practical terms, paying off what the public sector owes would take almost ten months of everything the country produces in a year. In cash terms, the debt stands at R$ 10.95 trillion.

The public accounts posted a primary surplus of R$ 1.4 billion in the same month, against a deficit of R$ 66.6 billion in July 2025, a month weighed down by the payment of precatórios, the government debts recognized by Brazil's courts. The surplus came from the federal government, which saved R$ 11 billion; states and municipalities ran a deficit of R$ 8.5 billion, and state-owned companies of R$ 1.1 billion. Even so, the monthly result covers less than half a day of the interest paid in July, which totaled R$ 99 billion.

In short: the primary surplus is what the government collects minus what it spends, leaving interest on the debt out of the math. Gross debt adds up what the federal government, states, municipalities and state companies owe, measured against GDP, everything Brazil produces in a year. When interest exceeds the budget surplus, the debt keeps rising even in a good month.

Yearly accounts still in the red

In the first seven months of the year, the public sector has a primary deficit of R$ 78.8 billion, equal to 1% of GDP, up from R$ 44.5 billion (0.61% of GDP) in the same period of 2025. That already exceeds the central target for the year, which allows a deficit of R$ 34.3 billion, though the rules let the government exclude up to R$ 63.5 billion of spending from the calculation. The federal government alone has accumulated a deficit of R$ 82.4 billion.

Interest pushes the debt up

Interest is the main driver of the rise: it totaled R$ 1.15 trillion over 12 months, 8.67% of GDP, roughly R$ 3 billion a day. Brazil's benchmark rate, the Selic, stands at 14% a year as the Central Bank fights inflation, and it makes rolling over the debt more expensive. According to Poder360, nominal interest alone added 0.8 percentage points to the debt in July, while the growth of the economy helped cut the ratio by 0.5 point.

Under President Luiz Inácio Lula da Silva, the debt has risen 10.8 percentage points in a little over three years, according to news portal G1. Under the IMF's measure, which counts government bonds held by the Central Bank itself, Brazilian debt reaches 95.4% of GDP, above the Eurozone average. The fiscal framework approved in 2023 to replace the spending cap is meant to keep expenditures growing below revenue, but expenses outside its limits keep pushing the debt up, and analysts argue that deeper spending cuts are needed to bring interest rates down.