Brasil

VOLVER

1. Amazon River Mouth auction hits record revenues

This week, amid budgetary pressures and regulatory challenges, Brazil concluded the largest offering of oil exploration blocks in the Amazon region. The auction raised a record R$ 989 million, with R$ 845 million coming exclusively from the 19 blocks awarded in the Amazon River Mouth. Two consortia, including major international oil companies, dominated the bidding for the region. Petrobras, in partnership with ExxonMobil, acquired ten blocks for R$ 262 million, while the consortium formed by Chevron Brasil Óleo and CNPC Brasil secured nine blocks for R$ 582 million.

Despite the financial success, the Amazon River Mouth auction reignited an intense debate. Fossil fuel exploration in vulnerable areas remains a central concern. Environmentalists and local communities fear potential impacts and strongly oppose the initiative. This event serves as a case study of the challenges facing the global energy transition, as the demand for oil continues to clash with the urgency of decarbonization and the imperative of environmental protection. It highlights the ongoing tension between traditional economic development and the pursuit of sustainability.

Exame: Leilão da Foz do Amazonas: como ‘janela ambiental’ rendeu R$ 845 mi a consórcios globais

2. Brazil’s Central Bank raises Selic rate to 15% per year

The Central Bank’s Monetary Policy Committee (Copom) has raised the benchmark interest rate (Selic) from 14.75% to 15% per year, reaching its highest level since July 2006. The decision aligns with the ongoing strategy of the monetary authority to bring inflation closer to its target. It also reflects an adverse external environment marked by geopolitical and fiscal conflicts, as well as U.S. economic policy.

Copom stated it is closely monitoring how developments in Brazil’s fiscal policy affect monetary policy and financial assets. Fiscal matters remain at the center of political debate, especially after the government announced, at the end of May, measures to increase the Financial Transactions Tax (IOF) on various operations.

On the other hand, if the current interest rate policy yields short-term results, Copom has indicated it may pause the cycle of hikes to assess the effects of the adjustments made thus far.

Valor Econômico: BC eleva a Selic a 15%, maior patamar desde julho de 2006

3. Congress exempts investment funds from VAT

Amid strong criticism from the agribusiness sector regarding the Financial Transactions Tax (IOF) package, Brazil’s National Congress overturned a presidential veto, removing the application of Value-Added Tax (VAT) on investment funds. As a result, real estate investment funds (FIIs) and agribusiness investment funds (Fiagros) will be exempt from the new Goods and Services Tax (IBS) – a state and municipal tax – and the Contribution on Goods and Services (CBS), the new federal tax.

This decision marks a victory for the financial market and investors, who feared that the new taxation would negatively impact the profitability and appeal of these products. It also signals relief for the investment sector. Congress’s move comes during a broader debate over tax reform and the government’s search for new sources of revenue. Overturning the veto highlights the complexity of implementing fiscal changes without triggering pushback from major economic sectors. While the agribusiness sector criticizes the IOF, capital markets celebrate the preservation of VAT exemption for funds, revealing the diverse pressures faced by Congress.

G1: Em meio a críticas do agro por pacote do IOF, Congresso derruba veto e afasta cobrança de IVA sobre fundos de investimento
Estadão: Congresso derruba veto e livra fundos imobiliários e do agronegócio de taxação na reforma tributária

4. Brazilian GDP falls 0.4% in April

Brazil’s economic activity shrank by 0.4% in April compared to March, according to the GDP Monitor published by the Brazilian Institute of Economics at Fundação Getulio Vargas (IBRE/FGV). The decline signals a slowdown at the start of the second quarter, following stronger growth in the first quarter, and raises concerns about the country’s economic recovery trajectory. The contraction suggests that high interest rates and persistent inflation continue to affect both consumption and investment.

Compared to April 2024, however, the economy grew by 1.6% in April 2025. The 12-month accumulated growth rate through April stands at 3.1%. These figures indicate that while short-term volatility persists, the broader outlook remains one of expansion. For this reason, experts emphasize the importance of monitoring the coming months to determine whether April’s slowdown was a temporary dip or the beginning of a more sustained trend. In either case, the situation calls for caution and close tracking of key economic indicators.

InfoMoney: Monitor do PIB aponta queda de 0,4% em abril ante março, aponta FGV

5. Brazil-Argentina agreement establishes zero tariff on auto parts

The automotive agreement between Brazil and Argentina has been expanded to include a zero tariff on parts and components, a significant step toward deeper integration of the two countries’ production chains. This measure aims to strengthen the regional automotive industry, streamline the flow of inputs, and reduce production costs for automakers. The expectation is that the expansion of the agreement will boost the sector’s competitiveness by generating jobs and attracting investments on both sides of the border. It represents a joint effort to stimulate bilateral trade and address shared economic challenges.

The agreement’s expansion marks progress in Brazil-Argentina trade relations, reinforcing their strategic partnership in the automotive sector. The zero tariff on parts acts as a direct incentive for local production and exports, benefiting both large manufacturers and small suppliers. This move is seen as crucial for post-pandemic economic recovery and for building a stronger, more interconnected industrial base. The agreement underscores the importance of regional cooperation policies for sustainable development and economic resilience.

CNN Brasil: Acordo automotivo Brasil-Argentina é ampliado com tarifa zero para peças
Folha de SP: Governo amplia acordo automotivo com Argentina com tarifa zero para autopeças