Brazil is projected to record the second-largest increase in public debt among G20 economies between 2022 and 2025 [1, 2].
This trend signals growing fiscal pressure on the South American nation as it navigates the final stages of President Luiz Inácio Lula da Silva’s third term. The trajectory of the country's debt relative to its economic output serves as a primary indicator of long-term financial stability and investor confidence.
According to a study by the Instituto Teotônio Vilela, also known as Farol da Oposição, Brazil's public-debt-to-GDP ratio is expected to rise by 12.6 percentage points [1]. The think-tank, which is linked to the PSDB party, said its findings were based on fiscal dynamics identified in data from the International Monetary Fund [1].
Within the Group of Twenty, only China is projected to see a larger increase in debt during this period [1]. The study said these fiscal shifts will be fully reflected by the end of the current presidential term in 2026 [1].
The report further indicates that Brazil will hold a significant position in global indebtedness. By the end of 2026, the country is projected to be the 22nd most indebted nation in the world [1].
The rise in debt is attributed to the specific fiscal dynamics occurring between 2022 and 2025 [1]. These movements highlight the challenge of balancing public spending with revenue generation in one of the world's largest emerging markets.
“Brazil's public-debt-to-GDP ratio is expected to rise by 12.6 percentage points.”
The projection places Brazil in a precarious position relative to its G20 peers, suggesting that its debt growth is outpacing most other major economies. Because the debt-to-GDP ratio measures a government's ability to pay back what it owes, a sharp increase can lead to higher interest rates and reduced capacity for public investment. This fiscal trajectory may limit the government's flexibility in implementing economic policies as the 2026 term concludes.
