The Treasury projects gross debt of 77,3% of GDP in 2024 and says fiscal improvement depends on approved measures.
In a report with fiscal projections, the Treasury also estimated that the central government's primary deficit will be zero this year.
BRASILIA (Reuters) - The National Treasury projected this Friday that the gross debt of the general government will rise from 74,3% of Gross Domestic Product (GDP) in 2023 to 77,3% of GDP this year and will continue to rise, beginning a downward trajectory only from 2029 onwards.
In a report with fiscal projections, the Treasury also estimated that the central government's primary deficit will be zeroed this year, reaching positive results of 0,2% of GDP in 2025 and 0,7% of GDP in 2026.
The Finance Ministry agency stressed that fiscal improvement depends on the implementation of measures approved by Congress.
"This projected recovery for the three-year period from 2024 to 2026 assumes the implementation of the revenue measures included in the 2024 Annual Budget Law," the Treasury said in the report, after the government approved a series of revenue-raising measures, such as those dealing with the taxation of exclusive funds, offshore funds, and online betting.
"A significant portion of these measures has a lasting effect on revenue collection, resulting in a structural increase in revenue over the entire time horizon," he added.
In this scenario, the Treasury expects the government's net revenue, which discounts transfers to states and municipalities, to increase from 17,5% of GDP last year to 18,9% of GDP in 2024, 19,2% of GDP in 2025, and 19,7% in 2026.
On the expenditure side, the Treasury expects to achieve a downward trajectory for spending as a percentage of GDP in the coming years. The estimate is that this indicator will rise from 18,9% to 19,0% of GDP between 2024 and 2025 and then begin to fall, reaching 17,1% of GDP in 2033.
According to the ministry's estimates, gross public debt will rise to 78,1% of GDP in 2026, a level that will remain stable in the following two years. In 2029, the projection is for a drop to 77,6% of GDP, a decline that will bring gross debt down to 72,6% of GDP in 2033.
In 2023, the government approved a new framework for public accounts that stipulates that the growth in spending will be proportionally lower than the performance of revenue collection, a model that, according to the economic team, will force an improvement in fiscal data in the medium term.
(By Bernardo Caram. Edited by Isabel Versiani)