Rio de Janeiro cuts state debt by over R$40 bn after joining federal Propag program

The state of Rio de Janeiro formally joined the federal Programa de Pleno Pagamento de Dívidas dos Estados (Propag) on 22 June 2026. The agreement reduces the state's debt to the Union from about R$210 billion to roughly R$168.5 billion – a cut of more than R$40 billion – and eliminates interest, leaving only inflation‑linked adjustments. Monthly payments to the Union will fall from around R$436 million to R$119 million, generating an estimated R$3.1 billion of savings in 2026 and extending the final repayment deadline to 2056.

President Luiz Inácio Lula da Silva called the deal a “civilizatory agreement” and said the freed resources must be directed to social policies, especially health and education. Governor‑in‑charge Ricardo Couto, referred to by Lula as an “interventor”, pledged to allocate at least R$900 million this year and R$2.2 billion next year to those priority areas. The program also requires the state to invest 1 % of the remaining debt balance in infrastructure, technical education and public security.

Other officials present at the ceremony included Vice‑President Geraldo Alckmin, Casa Civil minister Miriam Belchior and Finance minister Rogério Ceron. The accession also triggered the state’s exit from the previous Regime de Recuperação Fiscal and opened the possibility of renegotiating R$30 billion of bank liabilities under similar terms.