VOLVER

1. Chamber of Deputies overturns IOF alternative, increasing fiscal pressure

The Chamber of Deputies has rejected the Provisional Measure that would have replaced the IOF tax increase and introduced new forms of taxation, including retroactive charges on betting companies and taxes on fintechs. The decision is expected to create a fiscal impact of R$ 46.5 billion by 2026. The proposal sought to boost revenue through adjustments in taxes on investments, Interest on Equity (JCP), and undue compensation, but faced strong political and business sector resistance.

The government will now need to find alternative measures to balance the budget and meet its fiscal target. Finance Minister Fernando Haddad has already acknowledged the possibility of additional budget freezes, which could affect up to R$ 10 billion in parliamentary amendments. The defeat also underscores growing tension between the Executive branch and part of its allied base amid an increasingly early electoral climate. President Lula is considering new containment measures and possible decrees to restore revenues, but he faces the risk of further friction with Congress and economic sectors.

O Globo: Câmara derruba MP alternativa ao IOF, e governo prevê rombo de mais de R$ 40 bi nas contas

2. Exports to the US decline in September

Brazilian exports to the United States fell by 20.3% in September, the second month after the Trump administration imposed a 50% surtax on Brazilian products. Brazil recorded a trade deficit of US$ 1.77 billion with the US, resulting from US$ 2.58 billion in exports and US$ 4.35 billion in imports. The drop in sales affected both tariffed items, such as beef, sugar, weapons, and tobacco, and exempt products, like pulp and iron ore. The Ministry of Development, Industry, Trade and Services (MDIC) forecasts that the downward trend will likely continue in the coming months.

Amid mounting losses, President Luiz Inácio Lula da Silva spoke with Donald Trump, requesting a review of the tariffs and sanctions imposed on Brazilian officials. Both leaders agreed to maintain a direct communication channel and are planning an in-person meeting soon. Relations between the two countries are currently at one of their most delicate moments, and the Brazilian government hopes dialogue will reduce trade barriers and restore balance in bilateral exchanges.

Folha de S.Paulo: Exportações brasileiras aos EUA caem 20,3% em setembro, 2º mês de tarifaço de Trump
G1: Em conversa de 30 minutos, Lula e Trump ‘relembraram boa química’ e petista pediu retirada de tarifaço, diz Planalto

3. IIndustry records another decline and jobs are impacted

Brazil’s industrial revenue fell 5.3% in August, according to the National Confederation of Industry (CNI), marking the fourth drop in six months. Compared with the same period in 2024, the decline reaches 7.6%. The CNI attributes the weak performance to high interest rates, increased imports, and the appreciation of the Brazilian real, factors that undermine competitiveness and put pressure on exports. Despite the sequence of declines, the sector still showed a 2.9% increase in revenue from January to August compared to the same period last year.

Industrial employment has remained stagnant for four months, reflecting the slowdown in activity. Hours worked fell 0.3% in August, and real wage mass dropped 0.5% during the month. So far this year, wages are down 2%, and average worker income has decreased 4.1%. Even so, capacity utilization rose slightly to 78.7%, indicating that companies are maintaining a degree of production stability, though still under pressure from rising costs and weakening demand.

InfoMoney: Faturamento industrial cai 5,3% em agosto e emprego fica estagnado, revela CNI

4. Trade surplus falls in September

Brazil recorded a trade surplus of US$ 2.99 billion in September, a 41.1% drop compared to the same month in 2024, according to data from the Ministry of Development, Industry, Trade and Services (MDIC). The decline was influenced by the import of an oil platform from Singapore, which drove foreign purchases up by 17.7%.

From January to September, the cumulative surplus reached US$ 45.48 billion, a 22.5% decrease compared to the same period in 2024. The government has revised its 2025 projections, raising the forecast for a positive balance to US$ 60.9 billion, expecting stronger export growth and a slight decline in imports.

Agência Brasil: Balança comercial registra superávit de US$ 2,99 bi em setembro

5. COP30 could generate R$ 3.3 million for family farmers

With one month to go before COP30, the city of Belém is preparing to include family farming in the event’s food supply chain. For the first time, the conference’s public notice requires that at least 30% of the ingredients served to participants come from family farms, agroecological production, and traditional communities.

The initiative aims to strengthen the link between sustainability and the local economy, while also meeting the criteria set by the Organization of Ibero-American States (OEI) for the event.

According to a study by the Regenera and Fronteiras do Desenvolvimento institutes, the region has about 80 groups and 8,000 families eligible to participate in the conference, which could generate up to R$ 3.3 million in economic activity.

Agência Brasil: COP30 poderá gerar R$ 3,3 milhões para agricultores familiares