1. January IPCA eased to 0.16%

The Broad National Consumer Price Index (IPCA), Brazil’s official inflation rate, decelerated in January to 0.16%, the lowest rate for January since the implementation of the Real in 1994. Compared to the previous month (December), when inflation stood at 0.52%, the index dropped by 0.36 percentage points.

The slowdown was mainly driven by a decrease in electricity prices, which negatively impacted the Housing group, contributing to a reduction in overall inflation. However, the Transportation and Food and Beverages groups saw significant increases. The Transportation group rose by 1.30%, driven by higher airfares and urban bus fares. Meanwhile, the Food and Beverages group increased by 0.96%, pushed up by rising prices for items such as carrots, tomatoes, and ground coffee. The combined effect of these adjustments led to an increase in the cost of living, despite the more moderate inflation rate in January.

CNN Brasil: IPCA desacelera a 0,16% em janeiro, menor taxa para o mês desde 1994

2. Steel and aluminum tariffs: impacts on Brazil and international trade

U.S. President Donald Trump announced the imposition of 25% tariffs on steel and aluminum imports, affecting major suppliers such as Brazil, Canada, and Mexico. The new decree revoked tax-free exemptions and quotas that had previously benefited these countries.

Trump stated that his aim was to boost domestic production of these metals, justifying the measure as a way of protecting American industry. However, he left the door open for a possible exception on Australia due to its trade surplus with the U.S. Meanwhile, Brazil, one of the largest steel exporters to the United States, stands to be among the most affected by this decision. In 2024, Brazil exported 4.1 million tons of steel to the U.S.

The tariffs imposed by the Trump administration are part of a broader protectionist strategy aimed at reducing imports and safeguarding U.S. domestic industries. In addition to steel and aluminum, the U.S. president also hinted at the possibility of applying further tariffs on other products, such as automobiles and pharmaceuticals.

BBC News Brasil: ‘Sem exceções ou isenções’: como tarifas de Trump vão afetar aço e alumínio do Brasil e outros países
G1: Como tarifas de Trump a aço e alumínio do Brasil e do mundo podem prejudicar economia americana

3. Service sector grows 3.1% in 2024, maintaining growth trend

Brazil’s service sector recorded 3.1% growth in 2024, marking the fourth consecutive year of expansion, an unprecedented achievement since the historical series began in 2012. This performance surpassed the 2.9% growth seen in 2023 and contributed to a cumulative increase of 27.4% between 2021 and 2024.

Among the five segments analyzed, four showed growth, with notable performances from information and communication services and professional, administrative, and complementary services, both rising by 6.2%. In contrast, the transportation sector was the only segment to register a decline, contracting by 0.7%, mainly due to lower revenue from road freight transportation.

Despite the annual growth, December saw a 0.5% drop in service volume, marking a cumulative 1.9% decline over the last two months of the year. The “other services” category was the most affected, with a 4.2% decrease, while services provided to households grew by 0.8%, sustaining strong performance in the second half of the year.

Nevertheless, the service sector ended 2024 at a level 15.6% above the pre-pandemic period, although it remained 1.9% below the historical record set in October of the same year.

Agência Brasil: Setor de serviços cresce 3,1% em 2024, mostra IBGE

4. Carnaval expected to generate R$ 12 billion in tourism revenue in 2025

The 2025 Carnaval is projected to generate R$ 12.03 billion in revenue for Brazil’s tourism sector, a real growth of 2.1% compared to last year, according to estimates from the National Confederation of Commerce of Goods, Services, and Tourism (CNC). The increase is expected to be driven by a rise in foreign tourists, attracted by favorable exchange rates and Brazil’s rich cultural diversity. If the projection holds, it will be the highest Carnaval revenue since 2015.

The food, transportation, and accommodation sectors will be the primary beneficiaries, accounting for 83% of total revenue. Bars and restaurants are forecasted to lead earnings, with R$ 5.4 billion, followed by passenger transportation services (R$ 3.31 billion) and lodging (R$ 1.28 billion). Beyond its direct economic impact, Carnaval boosts Brazil’s international tourism profile, which already broke records in 2024 with 6.66 million foreign visitors and an annual revenue of US$ 7.34 billion.

In addition to its financial impact, Carnaval is set to create 32,600 temporary jobs, mainly in bars and restaurants (22,850 positions), hotels and inns (4,060), and transportation services (3,310). However, the retention rate for these workers after the event is expected to be only 7%, reflecting a more moderate economic outlook for 2025. Despite these challenges, the CNC emphasizes that the tourism sector has solidified its recovery since the pandemic, maintaining a growth trajectory with revenues 11% above those recorded in February 2020.

Agência Brasil: Comércio espera receita de R$ 12 bilhões no turismo durante o carnaval

5. New social security contributions for MEIs and self-employed workers take effect

Individual micro-entrepreneurs (MEIs) and self-employed workers must be aware of new INSS contribution rules, adjusted based on the new minimum wage of R$ 1,518. The first payment is due on the 17th for self-employed workers and on the 20th for MEIs.

For MEIs, the monthly contribution is now R$ 75.90, while MEI truck drivers will pay between R$ 182.16 and R$ 188.16, depending on the type of cargo transported. Self-employed workers can choose between a 20% rate, which grants eligibility for retirement based on contribution time, or an 11% rate, which does not include this benefit.

In addition to the adjustments, some occupations have been removed from the MEI regime in 2025, including agricultural applicators, pest controllers, and veterinary drug retailers.

Timely payment is crucial to ensure access to benefits such as retirement, sick leave, and maternity leave, as well as to maintain insured worker status. Payment slips can be generated through the Meu INSS website or app, and contributions must be made by the 15th of each month, or the next business day if the due date falls on a weekend or holiday.

Exame: Novo valor de contribuição para MEIs e autônomos entra em vigor nos próximos dias; veja calendário