After closing 2025 above R$8.6 trillion and at a record levelthe Federal Public Debt (DPF) is expected to reach between R$9.3 trillion and R$10.3 trillion at the end of this year. The numbers were released this Wednesday (28) by the National Treasury, which presented the Annual Financing Plan (PAF) for public debt for 2026.
The plan presents targets for public debt for this year. Just like last year, the government created space to reduce the share of fixed-rate securities (with fixed interest rates defined in advance) and increase the share of securities adjusted by the Selic rate (the economy’s basic interest rate). This would help attract investors to Selic-linked bonds, which are at their highest level in almost two years.
Last year, the PAF originally predicted that the Federal Public Debt could end 2025 at between R$8.1 trillion and R$8.5 trillion. In September, the PAF was revised so that the indicator would close 2025 between R$8.5 trillion and R$8.8 trillion.
Composition
According to the document, the DPF should end 2026 with the following composition:
- Selic-linked securities: from 46% to 50%, currently at 48.3%;
- Inflation-adjusted bonds: from 23% to 27%, currently at 25.9%;
- Prefixed titles: from 21% to 25%, currently at 22%;
- Exchange-linked securities: from 3% to 7%, currently at 3.8%.
The numbers do not take into account the purchase and sale of dollars in the futures market by the Central Bank, which affect the result.
Bonds adjusted by floating rates increase the risk of public debt, because the Selic puts more pressure on government debt when the economy’s basic interest rates rise. When the Central Bank readjusts basic interest rates, the part of the domestic debt corrected by the Selic increases immediately.
In theory, prefixed roles bring more predictability. This is because the interest on these bonds is defined at the time of issuance and does not vary over time. That way, the Treasury knows exactly how much interest it will pay several years from now, when the bonds mature, and investors have to be reimbursed. However, Prefixed bonds have higher rates than Selic and increase the cost of public debt in times of economic instability.
Term
The Annual Financing Plan also left room for increasing the DPF term. At the end of 2025, the average term was 4 years. The PAF stipulated that it will be between 3.8 and 4.2 years at the end of December. The Treasury releases estimates in years, not months. The portion of debt maturing in the next 12 months will end 2025 at between 18% and 22%. It is currently at 17.5%.
According to the Treasury, the government has two security mechanisms to guarantee financing capacity in the event of an economic crisis that does not allow the Treasury to launch bonds on the market. Firstly, the government has sufficient international reserves to pay external public debt maturities in 2026, which total R$33.3 billion. Furthermore, it has a cushion of R$1.187 trillion to cover 7.33 months of domestic public debt maturities.
Through public debt, the National Treasury issues bonds and borrows money from investors to honor commitments. In exchange, the government undertakes to return the resources with some correction, which may follow the Selic rate, inflation, exchange rate or be pre-fixed, defined in advance.
