Brasil
June 12th, 2026
1. Relationship between government and Congress is tested by the advance of fiscal “pork-barrel” bills
The Federal Senate of Brazil has moved forward with a series of legislative proposals with significant fiscal impact, known as “pork-barrel” bills, which pose a major fiscal challenge for the federal government. Among the measures gaining traction are those that expand mandatory spending and grant tax benefits, putting pressure on the federal budget at a time when fiscal responsibility efforts are underway.
The government is trying to curb the progress of the most harmful proposals to public accounts by offering alternatives or negotiating changes to the bills. However, the situation reflects strong pressure from specific interest groups on lawmakers and highlights the complex dynamics of governance, where support for the Executive’s agenda is often conditioned on large-scale fiscal concessions
Folha de S.Paulo: Pautas-bomba avançam no Senado e testam relação de Lula com Alcolumbre
2. Driven by transport and tourism, services sector registers unexpected growth in April
Brazil’s services sector recorded a 1.2% increase in April compared to the previous month, significantly surpassing market expectations, which had pointed to a 0.6% rise.
The result, released by the Brazilian Institute of Geography and Statistics, offsets the 1.1% decline recorded in March and leaves the sector just 0.3% below its historical peak. The growth was mainly driven by the transport sector, which expanded by 0.9%, and tourism-related activities, which posted a strong 4.1% increase in the month.
CNN Brasil: Setor de serviços do Brasil cresce bem mais que o esperado em abril
3. Banco Master’s shortfall could cost BRB R$ 8.8 billion
An external audit indicated that Banco de Brasília requires a capital injection estimated at R$ 8.8 billion to offset financial losses stemming from its operations with Banco Master. The amount is considered essential to restore solvency levels and ensure the operational stability of the Federal District’s public financial institution.
The case has triggered political reactions and calls for clarification from oversight bodies and lawmakers in the Federal District. BRB’s management and the local government are seeking alternatives to mitigate the financial impact and structure a capitalization plan that does not immediately strain public finances.
Agência Brasil: BRB precisa de %$ 88 bilhões para fazer frente às perdas com o Master
4. To reduce gasoline imports, government proposes increasing ethanol blend to 32%
The federal government is considering raising the share of anhydrous ethanol blended into gasoline from the current 30% to 32%. The proposal will be submitted by the Ministry of Mines and Energy of Brazil to the National Energy Policy Council and aims to reduce Brazil’s dependence on gasoline imports.
The measure seeks to strengthen the country’s energy security, reduce exposure to volatility in international fuel markets, and contribute to decarbonization goals. The expectation is that the change could eliminate the need for gasoline imports altogether.
Valor Econômico: https://valor.globo.com/brasil/noticia/2026/06/10/governo-quer-32-de-etanol-na-gasolina-para-conter-importacao.ghtml
5. Eurozone records first interest rate hike in nearly three Years to curb inflationary pressure
The European Central Bank raised its key interest rates by 0.25 percentage points, marking the first increase in nearly three years. The decision comes in response to persistent inflationary pressures in the eurozone, which have been exacerbated by high energy costs.
Following the move, the deposit rate rose to 2.25%, while the main refinancing rate increased to 2.40%. The ECB signaled that inflation is expected to remain above its 2% target in the coming years, justifying a more restrictive monetary policy stance.