The federal public debt in bonds – which includes government debts in Brazil and abroad – registered increase of 1.24% in July and reached R$ 5.395 trillion, informed the National Treasury Secretariat this Wednesday (25). In June, the debt totaled R$5.329 trillion.
Public debt is issued by the National Treasury to finance the federal government’s budget deficit. In other words, they are loans made to pay expenses that are above the collection with taxes and duties.
According to the National Treasury, the foreign market showed volatility in July (nervousness), with concerns about signs that economic growth could be reaching a peak amid the spread of the Delta variant of Covid-19 in several countries.
For this reason, the institution informed that it carried out, last month, issues of government bonds “below the average of the last 12 months, but keeping the cash position in a comfortable position for future expenses”.
Covid’s pandemic made the public debt exceed R$5 trillion for the first time at the end of 2020 – see the debt trajectory in the video below:
Public debt exceeds R$5 trillion for the first time in history
In July, issuances totaled R$142.44 billion, while redemptions reached R$118.08 billion.
As a result, issuances exceeded redemptions by R$24.37 billion last month, in addition to interest expenses of R$41.66 billion.
The National Treasury’s expectation is that the public debt will continue to grow in the coming months, and that it ends 2021 between R$5.6 trillion and R$5.9 trillion.
Holders and average cost
The National Treasury numbers also reveal that the foreign investors reduced their share of public debt last month.
In June, non-residents in the country held 9.71% of the total debt, equivalent to R$ 495 billion, changing to R$ 498 billion, or 9.67% of the total, in July.
As a result, foreigners are in fourth place as the main holders of domestic public debt, behind:
- financial institutions (R$1.586 trillion, or 30.77% of the total).
- investment funds (R$ 1.248 trillion, or 24.22% of the total);
- pension funds (R$1,151 trillion or 22.33% of the total);
The average cost of issuances of public bonds, in the last twelve months, increased from 7.18% a year in June to 7.64% a year in July, according to the National Treasury.