Financial budget adjustment and public debt carrying cost in Brazil 2002-2021

Gilberto Borça () and Nelson Barbosa-Filho

Brazilian Journal of Political Economy, 2023, vol. 43, issue 1, 110-124

Abstract: The paper presents a decomposition of the net interest paid by the Braziliangovernment, in 2002-2021, dividing the expenditure in four parts: the real-interest-ratecost, the inflation cost, the carry cost of fixed-income assets and exchange-rate swaps.The analysis also details the carry cost in terms of the government’s main financial assets:(international reserves and loans to the BNDES), showing that the financial adjustment of2016-2021 reduced the equilibrium primary balance in around 2.5% of GDP. JEL Classification: E62; H60; N16.

Keywords: Brazil; fiscal adjustment; net interest paid by the government (search for similar items in EconPapers)
Date: 2023
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