The strong increase in public debt path simulation considers that the Constitutional Amendment Proposal (PEC) will not be changed at Congress. This estimation, therefore, may change depending on PEC’s draft modifications or macroeconomic indicators performances. “It’s a very significant upward debt trajectory over the next few years”, says Andrea Damico, partner and chief economist at Armor Capital.
“Brazilian Real could be below USDBRL 5, and the country could be discussing interest rates cut by the end of 2023 first quarter, which was my scenario a week ago,” says Andrea, from Armor Capital. “But now we have seen a 10% BRL depreciation, which may impact inflation outlook. Market future interest rates are out of control. They advance 40 bps almost every day.”
Brazilian public Debt may end Lula’s administration period at 95% of GDP due to the Transition PEC, says investment management institution
The Transition Constitutional Amendment Proposal (PEC) draft, if it is not modified at the Congress, may strongly increase Brazil’s public debt, which may reach 95% of Gross Domestic Product (GDP) at the end of the next Luiz Inácio Lula da Silva (PT) government.
