VOLVER

1. Government package seeks to ease impact of the war on fuel prices and inflation

The Brazilian government announced a package aimed at curbing the rise in diesel and other fuel prices, amid the impact of the war and the risk of inflationary pressure in an election year. The measures include an increase in diesel subsidies, with support for both domestic production and imports, exemption from PIS/Cofins taxes on biodiesel and aviation kerosene (QAV), and a subsidy for the import of cooking gas. The goal is to reduce costs for consumers and productive sectors, with a significant fiscal impact.

On the enforcement side, the National Agency for Petroleum, Natural Gas, and Biofuels (ANP) will have strengthened oversight, with stricter penalties against abusive price hikes and supply refusals in crisis scenarios. According to the presidential office, the package aims to protect the population, maintain supply, and reduce the domestic effects of the price shock caused by geopolitical instability.

G1: O pacote do governo Lula contra alta do diesel e outros combustíveis em 5 pontos
Agência Brasil: Proposta de subsídio ao diesel importado tem adesão de 25 estados


2. Trade balance surplus falls short of expectations in March

Brazil’s trade balance posted a surplus of US$ 6.405 billion in March, below market expectations of US$ 7.350 billion. For the month, exports totalled US$ 31.603 billion, while imports reached US$ 25.199 billion. The performance was driven by higher external sales across all sectors, with a highlight on the extractive industry, which grew 36.4% thanks to oil, as well as gains in manufacturing and agriculture.

The Ministry of Development, Industry, Trade, and Services revised its projections and now estimates a surplus of US$ 72.1 billion in 2026, close to the lower end of the previous range. Exports are forecast at US$ 364.2 billion and imports at US$ 292.1 billion. The increase in imports reflects resilient economic activity and international prices. In the first quarter, the country accumulated a trade surplus of US$ 14.175 billion, above the positive balance of US$ 9.606 billion recorded in the first three months of 2025.

Folha de S.Paulo: Superávit comercial do Brasil decepciona e fica abaixo da meta
 

3. Unprecedented study suggests ending the 6×1 work schedule could raise costs and reduce competitiveness

The National Confederation of Industry (CNI) estimates that reducing the workweek from 44 to 40 hours, with the end of the 6×1 schedule, could lead to a 0.7% decline in Brazil’s GDP, equivalent to R$ 76.9 billion. According to the unprecedented study, the industrial sector would be the most affected, with a relative loss of 1.2%, followed by services, commerce, agriculture, and construction. The organization argues that, without a corresponding increase in productivity, labor costs are likely to rise and the country’s competitiveness to decline.

The CNI also warns of potential impacts on prices, consumption, and employment, as higher production costs could put pressure across the entire economic chain. In another projection, the confederation points to a possible average increase of 6.2% in inflation if the change moves forward. The debate over working hours is gaining traction in Congress, with support from the Lula administration and the Speaker of the Chamber of Deputies, Hugo Motta. However, the CNI advocates for a broader technical analysis before any decision is made, arguing that Brazil still faces low productivity and labor shortages.

Exame: 6×1: redução da jornada para 40 horas pode cortar R$ 76,9 bi do PIB, diz CNI


4. Government considers allowing FGTS withdrawals to pay off debts

The Brazilian government is evaluating the possibility of allowing part of the Severance Indemnity Fund (FGTS) to be used to help families pay off debts, Finance Minister Dario Durigan confirmed. The proposal, currently under study with the Ministry of Labor, aims to ease household budgets without compromising the fund’s security. Among the concerns are the risk of workers being left without savings in case of dismissal and the need to reduce overall indebtedness. The measure is part of a broader package to address rising default rates in the country.

In addition to the use of FGTS funds, the government is also considering regulating its use as collateral for private payroll-deducted loans and using unclaimed bank resources to strengthen the Credit Guarantee Fund (FGO). The main focus is to support low-income indebted families and consumers who are up to date on payments but allocate a significant share of their income to instalments. The idea is to enable renegotiation with discounts, new repayment terms, and migration to lower interest rates, in a model similar to the Desenrola program.

O Globo: Governo pode liberar FGTS para pagamento de dívidas, confirma ministro da Fazenda
Agência Brasil: Governo avalia uso do FGTS para quitar dívidas, diz Durigan
 

5. First income tax refund round expected to inject R$16 billion into economy

Brazil’s Federal Revenue Service is expected to pay around R$16 billion in the first batch of 2026 income tax refunds on May 29, benefiting approximately 9 million taxpayers. The amount, which is the largest ever projected for an initial round, is likely to act as a significant injection of resources into the economy, boosting household consumption and helping drive activity in commerce and services at a time of greater need for liquidity.

This year, the schedule has been adjusted, with payments concentrated into four batches between May and August. Priority will be given to those who file their returns early, use the pre-filled version, and choose to receive payment via Pix using their CPF. The measure brings forward an important portion of tax refunds and is expected to accelerate the flow of money into the market. Taxpayers not included in the first batch will remain in line for subsequent payments.

Folha de S.Paulo: Receita deve pagar R$ 16 bilhões no primeiro lote de restituição do IR 2026, o maior da história