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

Author

Listed:
  • Gilberto Borça Jr.
  • Nelson H. Barbosa-Filho

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.

Suggested Citation

  • Gilberto Borça Jr. & Nelson H. Barbosa-Filho, 2023. "Financial budget adjustment and public debt carrying cost in Brazil 2002-2021," Brazilian Journal of Political Economy, Center of Political Economy, vol. 43(1), pages 110-124.
    • Handle: RePEc:ekm:repojs:v:43:y:2023:i:1:p:110-124:id:2388
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    File URL: https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/2388/2325
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    More about this item

    Keywords

    Brazil; fiscal adjustment; net interest paid by the government;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean

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