Economists warn that the high level limits people’s consumption capacity as they have to direct resources to pay debts
The high level of household and public sector debt has the potential to slow down the growth of the Brazilian economy. Committing income to paying debts limits consumption capacity.
Family and government consumption expenditures have a relevant weight in the Gross Domestic Product (GDP), from the perspective of demand. Together, they reached 82.5% of GDP in 2025.
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Family consumption showed a slowdown, growing 1.3% last year. In 2024, the increase had been 5.1%. Government consumption expenditure increased by 2.1% in 2025, slightly above the previous year – with an increase of 2.0%.
economist and researcher at the (Center for Agribusiness Studies), states that there is a direct relationship between debt and reduced consumption. “Every additional real that enters the household must be allocated to pay debt, and not to increase consumption or make an investment”declared to the Poder360.
Data from the CNC (National Confederation of Commerce in Goods, Services and Tourism) show that the debt rate of Brazilian families. It is the highest level in the historical series, which began in 2015.
The percentage corresponds to the portion of families who reported having outstanding debts due to credit cards, special checks, store vouchers, payroll loans, personal loans, post-dated checks and car and house payments.
“This situation is not sustainable. High debt is problematic, but the main indicator is default. The problem is not having debt, but not being able to pay it”Serigati said.
The Gross Debt of the General Government in March 2026. The indicator grew 8.7 percentage points during the (PT) government.
economist and professor at the (Federal University of Pernambuco), draws attention to the high cost of paying interest on debt.
“The problem is that, the more the government spends and gets into debt, the higher the cost of maintaining and rolling over this debt becomes. With high interest rates, there is a nominal deficit caused by this increase in spending. This also generates inflation”he declared.
LIMITED GDP EXPANSION
On Monday (April 27), the financial market GDP in 2026, from 1.86% to 1.85%, according to the Focus Bulletin, published by . In 2025, the activity.
Costa claims that the increase was below potential. “It was an economy that didn’t take off. It grew, but very little given the increase in debt”these.
The economist relates the limitation of GDP growth to the debt of families and the public sector. “With high debt on both sides, families are under pressure and are unable to consume more, because a significant part of their income is used to pay debts. This slows down the economy due to the lack of expansion in consumption.”
With the payment of interest alone, there is a commitment of more than 10% of the monthly income of Brazilian families. When considering amortization and charges, according to data from the Central Bank.
NEW UNROLLS
On Monday (May 4), the Lula o Novo government unfolds. The expectation is that the debt renegotiation program will cover up to 90% of debts. It is Planalto’s new bet in an election year, with low interest rates (up to 1.99%).
According to Ecio Costa, the program tends to lead families back to consumption and the consequent debt: “It’s a perfect scenario for a storm that will happen later on. You have no financial education whatsoever, there are families who are also very involved with betting, which has become a real disease here in the country”.
In a statement on radio and TV on Thursday (April 30), President Lula stated that Brazilians who join Desenrola 2.0 will have access to the betting platform blocked for 1 year.
