VOLVER

1. Brazil generates over 257,000 formal jobs in April

Brazil ended the month of April with a positive balance of 257,528 formal jobs, according to data from the New General Register of Employed and Unemployed Persons (CAGED) released by the Ministry of Labor and Employment on Wednesday (28). This is the best performance for the month since 2020. The result reflects a scenario of consistent growth, with job creation in all 27 states and across the main sectors of the economy. So far this year, the country has created a total of 922,000 new formal jobs.

The services sector led job creation with 136,109 new positions, followed by commerce (48,040), industry (35,068), construction (34,295), and agriculture (4,025). The positive balance was mainly driven by individuals aged 18 to 24, who accounted for 126,300 jobs, and by workers with a high school diploma, who represented 191,084 of the new positions. In terms of wages, the average admission salary rose to R$ 2,251.81, a real increase of 0.71% compared to March.

Labor Minister Luiz Marinho highlighted that the result reflects the government’s efforts to keep the economy active despite the challenges posed by high interest rates, which he described as an obstacle to growth. The best performances came from São Paulo (72,283 jobs), Minas Gerais (29,083), and Rio de Janeiro (20,031), while the lowest job creation numbers were recorded in Alagoas, Roraima, and Acre.

Agência Brasil: Brasil registra saldo de mais de 257 mil novos empregos em abril

2. IPCA-15 slows to 0.36% in May

The Broad National Consumer Price Index – 15 (IPCA-15), considered a preview of Brazil’s official inflation, slowed in May, dropping from 0.43% in April to 0.36%, according to data released by IBGE (Brazilian Institute of Geography and Statistics). The main upward pressure came from residential electricity, which rose 1.68% due to a change in the tariff system, contributing 0.06 percentage points to the index.

So far in 2025, the IPCA-15 has accumulated a 2.80% increase, while over the past 12 months the index has risen 5.40%. Of the nine expenditure groups surveyed, seven posted price increases. The largest increases were seen in clothing (0.92%), health and personal care (0.91%), and housing (0.67%). In terms of impact, the health group led with a 0.12 percentage point contribution, driven by a 1.93% rise in pharmaceutical products following the medication price adjustment authorized in March.

Despite upward pressures, the transportation group helped slow the index, recording a decline of 0.29%. This drop was mainly due to an 11.18% decrease in airline fares and lower urban bus fares in cities such as Brasília and Belém. Meanwhile, fuel prices, which had fallen the previous month, posted a slight increase of 0.11% in May, driven by rising prices for ethanol (11.84%) and gasoline (4.11%).

CNN Brasil: “Prévia da inflação”: IPCA-15 desacelera a 0,36% em maio, diz IBGE

3. IOF increase likely to be challenged in court

The decree issued by the Lula administration raising the IOF (Tax on Financial Transactions) rates has sparked strong reactions in both Congress and the legal community. Opposition lawmakers have introduced two Legislative Decree Bills (PDLs) – one in the Chamber of Deputies and another in the Senate – in an effort to overturn the measure. They argue that the increase was implemented without prior notice, leaving no time for economic agents to prepare. Moreover, legal experts claim the government is using a tax with a regulatory purpose for revenue generation, which could violate its constitutional intent.

The main criticism centers on the impact of the increase on international credit card transactions, foreign currency purchases in cash, and contributions to private pension plans, especially VGBL-type plans. Legal and tax experts highlight that the decree breaks with the previous signal of a gradual reduction of the IOF through 2029, creating legal uncertainty and undermining predictability. Companies and investors, particularly those with long-term contracts, were caught off guard by the cost increase, without sufficient time to adjust.

From a legal standpoint, questions have been raised about the constitutionality of the measure, especially regarding the deviation from the IOF’s intended regulatory function toward a purely fiscal one. While the Federal Supreme Court (STF) has historically upheld executive decrees concerning the IOF, experts believe there is room for legal challenge, especially if it can be shown that the measure’s primary aim was to raise revenue. Beyond the risk of judicial disputes, the move is seen as a negative signal to investors and to Brazil’s broader economic environment.

O Globo: Alta do IOF já sofre ofensiva política e deve ser contestada na Justiça

4. Committee approves end of reelection and five-year terms

The Senate’s Constitution and Justice Committee (CCJ) has approved a proposed constitutional amendment (PEC) that ends reelection for mayors, governors, and the president of Brazil. The proposal also extends the term length to five years and unifies the dates of municipal and general elections starting in 2034. If approved by the full Senate and subsequently by the Chamber of Deputies, mayors, governors, and the president will be allowed to run for reelection one last time in the 2028 and 2030 elections, depending on the office.

In addition to ending reelections, the PEC sets new term lengths for all elected positions. Mayors, city councilors, state and federal deputies, governors, and the president will all serve five-year terms. For senators, the term, currently eight years, will be reduced to five after a transition period. The proposal also changes the election process for the presidents of the Chamber of Deputies and the Senate, who will serve three- and two-year terms, respectively, within the same legislative session.

Another key provision is the unification of election cycles. Beginning in 2034, all elections, municipal and national, will be held on the same day, with a fixed five-year interval between cycles. According to the bill’s rapporteur, Senator Marcelo Castro, the reform is expected to reduce costs, streamline electoral processes, and decrease the constant strain caused by frequent election campaigns. The expectation is that these changes will encourage greater political renewal and allow elected officials to focus more on long-term and structural projects.

G1: CCJ do Senado aprova fim da reeleição para presidente, prefeitos e governadores

5. National Treasury reports more balanced public debt distribution

Brazil’s National Treasury Secretariat (STN) announced that in April and May, the issuance of public debt securities showed a more balanced distribution, with a focus on fixed-rate and inflation-linked bonds, which together accounted for around 60% of total issuances. According to the April Monthly Debt Report (RMD), these instruments represented 57.4% of that month’s issuances alone. Helano Borges Dias, General Coordinator for Public Debt Operations, emphasized that the improved composition reflects a strategy aimed at reducing risks and increasing predictability in debt management.

Despite this progress, the share of fixed-rate bonds in the Federal Public Debt (DPF) stock declined from 21.51% in March to 20.23% in April, while inflation-linked securities increased from 28.01% to 28.46%. Meanwhile, floating-rate bonds saw their share rise to 47.3%. These figures remain broadly aligned with the parameters of the Annual Financing Plan (PAF), although deviations from the plan do not result in penalties. A favorable external environment, characterized by reduced tariff pressure from the US and falling commodity prices, helped lower the interest rates demanded by investors, contributing to record-high issuances of R$ 204.6 billion in April.

Total federal debt rose by 1.44% in April, reaching R$ 7.617 trillion, still below the PAF’s projected range of R$ 8.1 to R$ 8.5 trillion. The Federal Domestic Public Debt in Securities (DPMFi) stood at R$ 7.31 trillion, while external debt was R$ 306.13 billion, a slight decline of 1.1%. There was also an improvement in maturity indicators: the percentage of debt maturing within 12 months dropped to 17.92%, and the average maturity increased to 4.17 years. On an international comparison basis, average maturity rose from 5.62 to 5.72 years, reflecting a more prudent and sustainable approach to managing Brazil’s public debt.

Valor Econômico: Tesouro vê distribuição mais favorável da dívida