An increase in average government debt, driven by an increase in the cost of new issuance of bonds and other securities over the next five years, would lead to significantly greater pressure on government accounts (more expenditure on interest, which would directly worsen the budget deficit or reducing or canceling forecast surpluses).
But even in a scenario in which average interest rates deteriorate by a further 0.5 percentage points (pp) per year until 2027, the impact on accounts remains “limited”, calculates the Public Finance Council (CFP).
This increase of 0.5 percentage points is not small, taking into account the enormous debt to be refinanced in the coming years, but the CFP believes that the Republic is more or less protected against catastrophe, even if it has to continue refinance the republic. achieve successive budget surpluses to reduce the government debt ratio to 60% of gross domestic product (GDP), the Council argues.
This year the debt burden should end at a still unaffordable 104.7%, according to the entity chaired by Nazaré Costa Cabral.
Source: DN
