Brazil's fiscal metrics worsen in September amid rising debt servicing costs

BRASILIA, Oct 31 (Reuters) - Brazil's key public finance metrics worsened in September, central bank data showed on Friday, reflecting heavy costs to roll over public debt and finance expenditures not covered by revenues.

The country's gross public sector debt rose to 78.1% of gross domestic product in September from 77.5% a month earlier, the data showed.

Interest payments by Latin America's largest economy have been pressured by tight monetary policy aimed at curbing inflation and by lingering fiscal concerns amid rapidly expanding public spending.

Since the start of President Luiz Inacio Lula da Silva's administration in 2023, Brazil's gross debt-to-GDP ratio, seen as an important indicator of solvency, has risen by 6.4 percentage points.

Central bank figures showed nominal interest payments jumped 82.5% from a year earlier to 84.7 billion reais ($15.7 billion) in September.

The public sector posted a primary deficit of 17.5 billion reais ($3.2 billion) for the month, broadly in line with economists' expectations in a Reuters poll.

Over the 12 months through September, the primary deficit reached 0.27% of GDP, while nominal interest payments rose to 7.89% of GDP, resulting in a nominal deficit equal to 8.16% of GDP.

($1 = 5.4039 reais) (Reporting by Marcela Ayres. Editing by Sharon Singleton and Mark Potter)