Debt interest payments to reach historic high in 2027, pressuring public finances
The preliminary draft of the 2027 National General Budget (PGN) is presented amid high fiscal restriction, marked by a sustained imbalance between income and expenses. In 2025, the Central National Government's income represented 16.3% of GDP, while total spending reached 22.7% of GDP.
TL;DR
- The 2027 budget draft anticipates a real increase of $19.1 billion, primarily driven by a 40.2% rise in debt service costs.
- Operating expenses are projected to fall by 3.3%, and investment by 12%, as debt service claims a larger share of the budget.
- Debt is expected to represent 24.9% of the 2027 budget, up from 18%-20% in previous years, while investment will drop to 13.8%.
- Interest payments alone are projected to reach $90 billion, surpassing spending on Health and Social Protection.
- The increasing rigidity of the budget limits the state's capacity to reallocate resources and respond to new priorities.
- High interest payments reduce public investment and increase exposure to financial market volatility, risking fiscal sustainability.