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Public Debt Projections Report 2021 – No 1

Public Debt Projections Report 2021 – No 1

The report updates the National Treasury scenarios for the General Government Gross Debt (GGGD) and Non-financial Public Sector Net Debt (PSND).

In addition to the public debt projections for a 10-year horizon, the report presents an analysis of the factors behind the changes in the GGGD and PSND in 2020 and 2021, in comparison to the immediately preceding year. The report also provides a set of debt sensitivity analyses to shocks in some variables that are crucial for the debt trajectory evolution. Moreover, the report addresses efforts undertaken by the government with a positive impact on public debt. Finally, the report provides an estimate of the primary balance required to reach different levels of debt.

In 2020, the GGGD-to-GDP ratio increased by 14.5 percentage points, mainly due to the crisis triggered by the new Coronavirus, and the fiscal measures that the government adopted to face the crisis. These measures significantly contributed to the 9.5% GDP general government primary deficit in the period. The PSND-to-GDP ratio, in turn, increased by 8.1 percentage points in 2020, also fundamentally due to the effects of the pandemic.

For 2021, compared to the previous year, the Treasury expects the GGGD-to-GDP ratio to decrease, ending the year at 87.2% in the baseline scenario. In the medium-term, the Treasury expects the GGGD to remain relatively stable until 2026 when the gross debt should reach its peak (88.5% of GDP). By the end of 2030, the projections point to a gross debt of 83.6% of GDP. In turn, the PSND-to-GDP ratio should increase until 2028, when it should amount to 76.5% of GDP. By the end of 2030, the Treasury expects the PSND to total 75.4% of GDP.

(the report is available only in Portuguese)