Amid the worst political crisis in decades, Brazil's federal government also faces a spiraling state debt crisis that could cost it as much as US$89 billion in lost revenue.
Brazilian states, hit by a two-year recession that has depressed tax revenues, are seeking to apply simple rather than compound interest on debt owed to the federal government. The change could cost the Treasury 313 billion reais, according to Finance Ministry calculations.
Brazil's Supreme Court ruled last week in favor of Santa Catarina state, which had requested the change. The decision, albeit an injunction issued by the court before its decision on the case's merit, could open a precedent allowing other states to demand the same treatment, Finance minister Nelson Barbosa warned on Apr. 8.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
