Federal public debt rises 0.97% in September and reaches R$9.383 trillion

The federal public debt rose 0.97% in September compared to August and totaled R$9.383 trillion, according to the National Treasury, which released the numbers on October 29. The advance shows that the stock of government bonds continues to grow, even with the occasional improvement in some indicators.

The internal debt, formed by bonds issued in real, reached R$9.037 trillion and grew 1.04% in the month. External debt totaled R$345.41 billion and fell 0.82%, according to InfoMoney, which detailed the Treasury data.

The indicator most observed by economists, the general government's gross debt, stood at 82.9% of GDP in September, according to the Central Bank. This concept includes the Union, states and municipalities and leaves out the BC and state-owned companies. In nominal values, the amount went from R$11.055 trillion in August to R$11.114 trillion in September. According to Money Times, the percentage was 82.93% of GDP, compared to 82.87% in the previous month, and represents the highest level in more than five years. The peak of the series was 85.10% of GDP, in March 2021.

Money Times attributes the pressure mainly to interest on the debt. The net redemption of securities carried out by the Treasury and the growth in economic activity offset part of this effect. In the public sector net debt metric, the index rose to 70.0% of GDP, compared to 69.3% in August.

Before the release, economists interviewed by Reuters expected that the September fiscal result, which brings together the Treasury, Central Bank and Social Security, would be a surplus of R$4.650 billion, according to InfoMoney. The actual result is not included in the material collected, and therefore it is not possible to say whether the expectation was confirmed.

In the same period, the Federal Reserve maintained American interest rates, with two directors voting for an increase, and long-term fixed rates rose for the second session in a row, according to InfoMoney. For those who defend fiscal responsibility, the central point is that the cost of debt grows along with the stock, and only a consistently positive primary result allows this account to be stabilized without depending on increasingly higher interest rates.

What changes for the investor

For those who invest and operate, the data reinforces that the debt trajectory continues under interest pressure, which is usually reflected in the remuneration required on public bonds and the fiscal risk environment. Higher long interest rates can also weigh on longer-duration assets, such as growth stocks and Nasdaq-listed securities, because they reduce the present value of distant earnings. As the effective fiscal result for September does not appear in the data collected, the next step to measure the direction of this pressure is to check this number and the evolution of the interest curve.

Automatically translated from Portuguese.