Debt management in Brazil : evaluation of the Real Plan and challenges ahead
Brazil's domestic debt has posed two challenges to policymakers: it has grown very fast and, despite progress, remains extremely short in maturity. The authors analyze Brazil's experience with domestic public debt management, searching for policy prescriptions for the next few years. After briefly reviewing the recent history of the country's domestic debt, they decompose the large rise in federal bonded debt in 1995-98, searching for its macroeconomic causes. The main explanations: extremely high interest payments (caused by Brazil's weak fiscal stance and quasi-fixed exchange rate regime) and the accumulation of assets (especially obligations of Brazil's states). Simulations of the net debt path for the near future underscore the importance of a tighter fiscal stance to prevent the debt-to-GDP ratio from growing further. The authors'main policy advice is to foster and rely more on inflation-linked bonds--the least harmful way to lengthen debt maturity.
|Date of creation:||31 Jul 2000|
|Date of revision:|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
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.:
- Pastore, Affonso Celso, 1996. "Por que a política monetária perde eficácia?," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 50(3), July.
- Robert T Price, 1997. "The Rationale and Design of Inflation-Indexed Bonds," IMF Working Papers 97/12, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2402. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.