Debt Management in Brazil: Evaluation of the Real Plan and Challenges Ahead
AbstractThe Brazilian domestic debt has posed two challenges to policy-makers: it has grown very fast and its maturity is extremely short. This has prompted fears that a default or a compulsory lengthening scheme would be imposed. Here, we analyse the domestic public debt management experience in Brazil, searching for policy prescriptions for the next few years. After briefly reviewing the recent domestic public debt history, we decompose the large rise in federal bonded debt during 1995-2000, searching for its macroeconomic causes. The main culprits are the extremely high interest payments--which, until 1998, were caused by the weak fiscal stance and the quasi-fixed exchange-rate regime; and since 1999, by the impact of the currency depreciation on the dollar-indexed and the external debt--and the accumulation of assets of doubtful value, much of which may have to be written off in the future. Simulation exercises of the net debt path for the near future underscore the importance of a tighter fiscal stance to prevent the debt-GDP ratio from growing further. Given the need to quickly lengthen the debt maturity, our main policy advice is to foster, and rely more on, inflation-linked bonds. Copyright @ 2002 by John Wiley & Sons, Ltd. All rights reserved.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal International Journal of Finance & Economics.
Volume (Year): 7 (2002)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://www.interscience.wiley.com/jpages/1076-9307/
Other versions of this item:
- Bevilaqua, Alfonso S. & Garcia, Marcio G. P., 2000. "Debt management in Brazil : evaluation of the Real Plan and challenges ahead," Policy Research Working Paper Series 2402, The World Bank.
- Afonso S. Bevilaqua & Márcio Gomes Pinto Garcia, 1999. "Debt management in Brazil: evaluation of the Real Plan and challenges ahead," Textos para discussÃ£o 408, Department of Economics PUC-Rio (Brazil).
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert T. Price, 1997. "The Rationale and Design of Inflation-Indexed Bonds," IMF Working Papers 97/12, International Monetary Fund.
- Roberto Rigobon & Marcio Garcia, 2004. "A Risk Management Approach to Emerging Marketâ€™s Sovereign Debt Sustainability with an application to Brazilian data," Econometric Society 2004 Latin American Meetings 24, Econometric Society.
- Francesco Giavazzi & Alessandro Missale, 2004.
"Public Debt Management in Brazil,"
NBER Working Papers
10394, National Bureau of Economic Research, Inc.
- Alessandro Missale & Francesco Giavazzi, 2003. "Public Debt Management in Brazil," Development Working Papers 178, Centro Studi Luca d\'Agliano, University of Milano.
- Giavazzi, Francesco & Missale, Alessandro, 2004. "Public Debt Management in Brazil," CEPR Discussion Papers 4293, C.E.P.R. Discussion Papers.
- Manoel Carlos de Castro Pires, 2006. "Uma Análise de Credibilidade na Política Fiscal Brasileira," Discussion Papers 1222, Instituto de Pesquisa Econômica Aplicada - IPEA.
- Márcio Gomes Pinto Garcia & Roberto Rigobon, 2004.
"A Risk Management Approach to Emerging Market’s Sovereign Debt Sustainability with an Application to Brazilian Data,"
Textos para discussÃ£o
484, Department of Economics PUC-Rio (Brazil).
- Marcio Garcia & Roberto Rigobon, 2004. "A Risk Management Approach to Emerging Market's Sovereign Debt Sustainability with an Application to Brazilian Data," NBER Working Papers 10336, National Bureau of Economic Research, Inc.
- Anastasia Guscina, 2008. "Impact of Macroeconomic, Political, and Institutional Factors on the Structure of Government Debt in Emerging Market Countries," IMF Working Papers 08/205, International Monetary Fund.
- Yu Hsing, 2003. "Impact of external debt and other macroeconomic policies on output in Brazil: a var approach," Revista de Analisis Economico – Economic Analysis Review, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines, vol. 18(2), pages 97-108, December.
- World Bank, 2002. "Brazil : The New Growth Agenda, Volume 1. Policy Briefing," World Bank Other Operational Studies 15289, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.