The State of Rio de Janeiro faces a decisive moment for balancing its public accounts. After nine years in the Fiscal Recovery Regime (RRF), a period marked by strong increases in debt, court injunctions, and renegotiations, the state joined the Full Debt Payment Program (Propag).
Joining Propag allowed the state to reduce the monthly debt installment to the Union from approximately R$ 490 million to R$ 119 million. Furthermore, the debt adjustment changed from IPCA plus 4% per year to something close to zero for the next 30 years.
According to the article, this represents a historic breather that offers the state a chance to contain the explosive trajectory of its debt. The relief represents a significant opportunity to reorganize the public finances of Rio de Janeiro.
However, the article warns that the relief does not represent a cure. The imposed conditions include a debt service that, although initially smaller, is expected to grow over time.
