Brazil’s gross public debt climbed to 81.1% of GDP in May, the highest level since May 2021, central bank data released on 30 June showed. The 0.9 percentage point increase from April overshot market expectations of 80.7%, propelled by a primary deficit of R$56.1 billion and a sharp rise in nominal interest payments. The debt stock reached R$10.62 trillion, while the net public sector debt rose to 67.9% of GDP.

Viewed from São Paulo, the interest burden is the immediate driver of the deterioration. Nominal interest payments totalled R$107.5 billion in May, lifting the 12-month accumulated cost to 8.48% of GDP—the highest since February 2016, when Brazil was in a severe recession. The central government alone accounted for R$97.9 billion of that bill. Including interest, the nominal deficit widened to 9.62% of GDP over the preceding 12 months, a metric closely tracked by credit rating agencies and one that keeps risk premiums elevated as investors demand compensation for financing rising public spending.

The primary deficit was concentrated in the central government, which posted a R$55.2 billion shortfall, while regional governments recorded a R$1.2 billion deficit and state-owned enterprises a modest surplus. Over the first five months of 2026, the consolidated primary deficit reached R$24.9 billion, a sharp reversal from the R$69.1 billion surplus in the same period of 2025, largely due to the early payment of court-ordered debts. The government’s fiscal target for the year is a deficit of 0.25% of GDP, with a tolerance band that allows a zero balance. Analysts in São Paulo note that the trajectory tests the credibility of the fiscal framework approved in 2023.

Separately, the Central Bank of Russia revised its estimate of the country’s external debt down to $299.1 billion as of 1 April 2026, from a preliminary $308.8 billion. The debt of other sectors fell by $2.5 billion to $169.3 billion, while the central bank and banking sector’s external liabilities declined by $4.8 billion to $106.7 billion. Government external debt edged down to $23.0 billion. In Moscow, the revision is seen as consistent with a multi-year trend of external deleveraging under sanctions and restricted access to international capital markets.

The next milestone for Brazil will be the central bank’s quarterly inflation report and any signals on the Selic rate, which at 14.25% continues to amplify debt-servicing costs. For Russia, the next quarterly external debt data will indicate whether the downward trend persists amid ongoing trade and financial restrictions.