Brazil’s top bank executives warned on Monday that the country’s public debt levels are on an unsustainable path, urging policymakers to implement fiscal adjustments to restore confidence in the economy.
Speaking at a financial sector technology event in São Paulo organized by the banking federation Febraban, CEOs of Bradesco, Itaú Unibanco, Santander Brasil and BTG Pactual highlighted the urgency of addressing structural imbalances in public finances. Gross public debt rose to 81.9% of GDP in June, up from 81.0% the prior month, while net public sector debt increased to 68.5% of GDP, according to official data.
The nominal deficit widened to nearly 10% of GDP in the 12 months through June, reaching R$1.318 trillion, equivalent to 9.99% of output, compared with 9.61% in May and 7.27% a year earlier. The National Treasury projects the debt ratio will continue climbing through 2029 unless corrective measures are taken.
Marcelo Noronha, CEO of Bradesco, emphasized the need for fiscal equilibrium, stating that political will is required to prevent debt from rising further relative to GDP. Milton Maluhy Filho, CEO of Itaú Unibanco, described the current debt trajectory as unsustainable, warning that sustained high borrowing costs—currently near 14%—pose long-term risks to economic stability.
Gilson Finkelsztain, CEO of Santander Brasil, stressed that Brazil must act swiftly to adjust its fiscal stance amid a more complex global environment where other economies are also tightening monetary policy. Roberto Sallouti, CEO of BTG Pactual, underscored the importance of productivity gains through education, technology adoption, infrastructure investment and innovation to offset demographic constraints and boost potential growth.
The warnings come as Brazil prepares for upcoming elections, with the banking sector calling for decisive action to restore fiscal credibility and attract capital amid heightened global competition.
