Brazil’s central bank released data on Monday showing that the South American nation’s debt as a share of gross domestic product (GDP) in 2022 sunk to its lowest level in over five years.
The country’s debt in December fell to 73.5% of its GDP from a figure of 74.6% the previous month. This is the lowest level since July 2017, when Brazil’s debt accounted for 73.2% of its GDP.
Among the drivers for this suppression of debt are an improved local job market, solid service activity, and an increase in government fiscal stimulus ahead of the presidential election that took place in October 2022.
Brazil’s public sector was largely influential in the debt turnaround, recording a primary deficit of 11.8 billion reais ($2.3 billion) but a primary surplus of 126 billion reais; its best result since 2011.
This positive result comes just two years after the South American nation posted a record deficit of 703 billion reais in 2020, largely caused by a sharp rise in spending during the coronavirus pandemic.