Brazil posted a dizzying nine-percentage point rise in its public sector debt in 2015, due to declining tax revenues and rising interest rates, the Central Bank said Friday. The total public sector debt rose to R$3.928 trillion in 2015 from R$3.252 trillion the previous year, an increase from the equivalent of 57.2% of gross domestic product at the end of 2014 to 66.2% at the end of 2015. The increase of nine percentage points, in GDP terms, is one of the main reasons behind cuts in Brazil’s sovereign credit rating. Two major credit agencies withdrew investment grade ratings for Brazil at the end of 2015, citing rising debt levels. Brazil’s public sector posted a record primary budget deficit in 2015 of R$111.2 billion, up from a 2014 deficit of R$32.5 billion. Higher interest rates meant debt service payments for public sector agencies in 2015 of over R$500 billion.
Link to Central Bank release.More Testimonials