Brasil
August 21st, 2026
1. Companies expect risks and slowdown for 2027
Large companies and banks listed on the Ibovespa are showing caution regarding the macroeconomic outlook for next year, projecting slower growth and even recession risks for 2027. Corporate pessimism is being driven by the high benchmark interest rate, persistent inflation, and rising consumer default rates.
Reflecting this environment of financial constraints, sectors such as retail are already implementing drastic cuts to investments and expansion plans, while public utility service providers are reporting negative impacts on revenue due to delays in the payment of essential bills. Analysts point out that tight monetary policy will continue to put pressure on companies’ cash flows and limit the pace of economic recovery in the short term.
Folha de S.Paulo: Empresas preveem crescimento menor e até recessão para 2027, com juro alto e inadimplência
2. Slow growth: IBC-Br rises 0.2% in the second quarter
The Central Bank Economic Activity Index (IBC-Br), considered a preliminary indicator of Brazil’s GDP, grew 0.2% in the second quarter of 2026, on a seasonally adjusted basis, compared with the previous three months. The result, released on Monday (17), points to a sharp slowdown from the 1.3% increase recorded in the first quarter of the year.
By sector, the IBC-Br posted modest gains in agriculture (0.3%) and industry (0.5%), while the services sector contracted 0.1%. On a monthly basis, the index fell 0.6% in June compared with May. Analysts believe the loss of momentum reflects the delayed effects of restrictive monetary policy, with interest rates kept at elevated levels to curb inflation.
CNN: “Prévia do PIB”: Economia registra forte desaceleração no 2º trimestre
3. Foreign capital outflows reach historic high in August
Brazil’s financial market recorded its largest foreign capital outflow since the economic shock of 2020. In August alone, international investors withdrew approximately R$18 billion from the country, highlighting a strong risk-off movement.
The significant exodus of funds reflects a combination of a cautious global environment and domestic uncertainties. The appeal of fixed-income securities in advanced economies, driven by still-high interest rates abroad, has been draining liquidity from emerging markets such as Brazil.
Domestically, concerns over the fiscal outlook and economic instability are contributing to the withdrawal of foreign capital. This negative financial flow is putting direct pressure on the dollar’s exchange rate against the Brazilian real and raising concerns about the Brazilian stock market’s ability to retain and attract large volumes of investment in the short term.
O Globo: Saída de estrangeiro da Bolsa já chega a R$ 18 bi em agosto
4. Price reduction: 2nd IGP-M preview shows 0.36% deflation in August
The second preview of the General Price Index – Market (IGP-M) recorded a 0.36% decline in August, signaling continued deflation in Brazil, although at a slower pace than the 1.11% drop recorded in July. The data were released on Wednesday (19) by the Getulio Vargas Foundation (FGV).
The result was mainly driven by a decline in the Broad Producer Price Index (IPA-M), which fell 0.50% during the period, and the Consumer Price Index (IPC), which reversed the previous month’s increase and recorded 0.49% deflation.
In contrast, the National Construction Cost Index (INCC) increased 0.73%, reflecting higher price adjustments in the sector. According to FGV economists, the continued decline in wholesale prices and consumer prices reinforces expectations that the overall IGP-M index will end August in negative territory.Valor Econômico: Prévia do IGP-M sinaliza deflação em indicador fechado de agosto
5. Tax reform brings forward Simples Nacional deadline
As part of the gradual transition to Brazil’s Tax Reform, the schedule for micro and small businesses to apply for enrollment in the Simples Nacional will change starting in 2027. Applications, traditionally submitted in January, will be brought forward to September of the previous year.
The change does not affect the way the simplified tax regime operates or its existence; it only adjusts its timeline to the new tax structure that will be implemented in Brazil. The Federal Revenue Service’s goal is to ensure that companies’ tax frameworks are already defined before the new tax year begins.
In practice, business owners seeking to join the Simples Nacional will need to pay closer attention and plan ahead. It will be essential to organize documentation in advance and resolve any outstanding tax issues several months beforehand, ensuring that the application is submitted and approved within the new September window.