2027 is an opportunity to change the trajectory of public debt, says Troster

Economist Roberto Luis Troster, coordinator of Cefeb/Fipe, sees 2027 as an opportunity for a change in the trajectory of public debt, if the country adopts fiscal and structural measures capable of recovering confidence and opening space for private investment.

Without mentioning any candidate for president, he says that the scenario requires measures to contain debt growth, improve the quality of public spending, increase competitiveness and reform mechanisms that make access to credit more expensive or difficult.

According to Troster, the increase in public debt and the high cost of interest are compressing the space for credit to the private sector and increasing the risks for companies and economic activity.

He says this happens because the government's growing need for financing increases the competition for resources in the market, putting pressure on interest rates and reducing the supply of credit to companies and families.

For the economist, the phenomenon can already be observed in Brazil due to the combination of an increase in public debt, high financing costs, a drop in credit growth and a deterioration in the quality of portfolios.

One of the warnings is the growth in default. According to data presented by the economist, around 9 million companies and 83 million people are negative. Considering delays between 15 and 90 days and defaults exceeding 90 days, 5.36% of the banks' credit portfolio would be in arrears.

Troster also highlights that medium and small companies are those most affected by the cost of money, as they have fewer financing alternatives. While large companies are able to access the capital market more easily, smaller companies remain more dependent on the banking system, where credit has high costs.