Selic Returns to 13.75% as Public Debt Hits 82.9% of GDP

The Selic rate ended its recent adjustment cycle at 13.75% per year. This level is identical to the one recorded in January 2023 at the start of President Luiz Inácio Lula da Silva's third term. Experts project that the rate could remain at this level until 2027.

The fiscal landscape is deteriorating alongside the growth of public debt. The figure jumped from 71.7% of GDP in December 2022 to 82.9% in September 2026. Analysts note that a series of primary deficits and increased spending on income transfer programs have fueled this trajectory.

The cost of rolling over the debt has become a point of concern for the market. Since a large portion of the debt is tied to the Selic rate, keeping interest rates high makes debt servicing more expensive. Economists emphasize that the lack of changes in fiscal policy puts pressure on inflation and forces the Central Bank to maintain a contractionary stance.

Meanwhile, the Workers' Party (PT) has launched a Pix fundraising campaign to settle expenses from Lula's election campaign. The party aims to raise R$ 7 million by November 11 to cover costs from the runoff. Data from the TSE show that the spending cap for the final stage of the race has been almost entirely exhausted.