Brazil's nominal budget deficit narrowed to R$40.1 billion in January 2026 from R$63.7 billion a year earlier, coming in slightly below forecasts of R$49.5 billion. The consolidated public sector posted a primary surplus of R$103.7 billion, compared to R$104.1 billion in January 2025. The Central Government and regional governments recorded surpluses of R$87.3 billion and R$21.3 billion, respectively, while state-owned enterprises posted a deficit of R$4.9 billion. Nominal interest expenses for the consolidated public sector totaled R$63.6 billion in January, up from R$40.4 billion a year earlier. The increase was driven by growth in the Selic rate and net debt stock, which more than offset gains from foreign exchange swap operations. Over the twelve-month period, the nominal deficit reached R$1,086.2 billion (8.49% of GDP).