Brazil Posts Largest Budget Gap in Nearly 6 Years

Brazil’s nominal budget deficit jumped to BRL 199.5 billion in March 2026, the largest since June 2020, from BRL 71.6 billion a year earlier, above market expectations of a BRL 148 billion gap. The central government gap widened to BRL 187 billion from BRL 69 billion in March 2025, and the regional governments' deficit climbed to BRL 11.3 billion from BRL 1.7 billion a year ago. At the same time, the state-owned companies' shortfall rose to BRL 1.3 billion, up from BRL 0.9 billion a year ago. The country's government debt as a share of the GDP increased to 80.1% from 79.2% the month before and surpassing market forecasts of 79.6%.

Brazil's nominal budget deficit widened to R$100.6 billion in February 2026 from R$97.2 billion. The consolidated public sector recorded a primary deficit of R$16.4 billion in February, compared to R$19.0 billion in February 2025. The Central Government posted a R$29.5 billion deficit while state-owned enterprises recorded a R$568 million deficit, offset by regional governments' R$13.7 billion surplus. Nominal interest on the consolidated public sector totaled R$84.2 billion in February 2026, up from R$78.3 billion in February 2025. This increase was driven by higher net indebtedness, the Selic rate, and inflation, more than offsetting two fewer business days and more favorable foreign exchange swap results. Over 12 months, the nominal deficit reached R$1,089.6 billion, representing 8.48% of GDP and remaining stable as a share of GDP compared to the prior month.

Brazil's nominal budget deficit narrowed to R$40.1 billion in January 2026 from R$63.7 billion a year earlier, coming in slightly below forecasts of R$49.5 billion. The consolidated public sector posted a primary surplus of R$103.7 billion, compared to R$104.1 billion in January 2025. The Central Government and regional governments recorded surpluses of R$87.3 billion and R$21.3 billion, respectively, while state-owned enterprises posted a deficit of R$4.9 billion. Nominal interest expenses for the consolidated public sector totaled R$63.6 billion in January, up from R$40.4 billion a year earlier. The increase was driven by growth in the Selic rate and net debt stock, which more than offset gains from foreign exchange swap operations. Over the twelve-month period, the nominal deficit reached R$1,086.2 billion (8.49% of GDP).