The indicator measuring the proportion of households with debt - whether delinquent or not - reached 82 percent in July, marking the highest level ever recorded for the sixth consecutive month. In June, the index stood at 81.6 percent, while in July of last year, it was 78.5 percent.

However, the share of households with overdue debts - known as delinquency - fell to 29.8 percent in July. In the previous month, it stood at 29.9 percent, while a year earlier it was 30 percent.

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The average delay in debt repayment stood at 64.6 days in July, continuing a downward trend since April, when it was 65.1 days.

The data come from the Consumer Indebtedness and Delinquency Survey (PEIC), released on Thursday (Aug. 6) by the National Confederation of Trade in Goods, Services, and Tourism (CNC).

The survey covers 18,000 households nationwide. It takes into account credit card debt, overdrafts, store credit, payroll loans (with installments deducted directly from wages), personal loans, postdated checks, and car and mortgage payments.

Household budgets under strain

The survey shows that, on average, 29.5 percent of households’ budgets are committed to debt payments. The average debt repayment period stood at 7.2 months, compared with 7.1 months a year earlier.

The CNC emphasizes that debt is not necessarily a negative financial behavior, since it allows households to channel resources toward consumption, thereby stimulating the economy as a whole.

However, the institution warns that debt levels become a cause for concern when households begin to face difficulties in meeting their payment obligations.

The survey reveals that credit cards are the main source of household debt, accounting for more than 85 percent of indebted households.

Income brackets

CNC figures show that debt is more prevalent among lower-income households: 84.9 percent of those earning up to three minimum wages report outstanding debt.

In contrast, among households with incomes above ten minimum wages, the share drops to 72 percent.

Regarding the delinquency rate, it stands at 38.5 percent among the poorest households and 15.1 percent among the wealthiest.

Selic rate cut

The debt survey was released the day after Copom, the Central Bank of Brazil’s Monetary Policy Committee, announced a cut in the Selic rate - the economy’s benchmark interest rate - from 14.25 percent to 14 percent per year.

Interest rates are being kept at a high level as a means of combating inflation, since higher interest rates make credit more expensive and, consequently, discourage consumption.

For CNC Chief Economist Fabio Bentes, the reduction in the Selic rate is an important step toward improving credit conditions, although its impact will take time to materialize.

“The decision to lower the benchmark interest rate is likely to help reduce the cost of new credit operations and facilitate debt renegotiations under more favorable terms,” he noted.

Bentes pointed out that the “high burden on household income” suggests that the recovery of households’ consumption capacity will be gradual.

Brazilian households lost over USD 12 billion to gambling last year. This amount represents the net figure – the difference between the money wagered and the money returned as winnings. It stands at an average of USD 920 million per month, covering October 2024 through March 2026.

The losses total 0.68 percent of the country’s gross national disposable household income and include transfers made via Pix to betting companies. During the same period, bets generated nearly USD 68 billion in transactions via the instant payment method.

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The data can be found in a report released this Thursday (Aug. 6) by the National Committee of Finance Secretaries (Comsefaz) and were based on Central Bank statistics.

The study shows that, since the regulation of sports betting in January last year, there has been a shift in the volume of Pix transfers directed toward the arts, culture, sports, and recreation sector – indicating that a larger portion of household income is being spent on betting.

The law regulating sports betting requires companies to block access for users identified as compulsive gamblers. According to attorney Júlio Leone, however, this has not been happening.

“When it is detected that a person has a gambling addiction […], the algorithm should freeze their account. But it does the opposite – it sends more bonuses, more vouchers, and more incentives to encourage them to keep betting. That’s when they lose all their money.”

Since October last year, when the ban on gambling for recipients of the Bolsa Família welfare program went into effect, there has been a slowdown in the pace of transactions, the figures show.

The results indicate that the measure had concrete effects on the aggregate volume of transactions, suggesting that lower-income families had a significant presence in the betting market.

With exports of USD 34.1 billion and imports of USD 27.1 billion, Brazil recorded a trade surplus of just over USD 7 billion in July. The data were released on Thursday (Aug. 6) by the Ministry of Development, Industry, Trade, and Services.

Trade flow (the sum of exports and imports) totaled USD 61.17 billion during the period, representing a 6.8 percent increase compared with July 2025. Both exports (up 6.2 percent) and imports (up 7.6 percent) rose compared with the same period last year.

Key exported and imported products

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According to the ministry, agricultural exports increased by 9.3 percent, driven mainly by soybean exports, which were up by approximately USD 870 million. In the extractive industry, crude oil exports rose by USD 960 million, while in the manufacturing sector, fuel oil exports also increased by USD 960 million. In the case of fuels, export growth exceeded 63 percent.

July’s imports were driven mainly by higher purchases of petroleum fuel oils (up USD 500 million), automatic data-processing machines and their units (up USD 320 million), medicines and pharmaceutical products, excluding veterinary products (up USD 320 million), thermionic, cold-cathode, or photocathode valves and tubes, diodes and transistors (up USD 290 million), and ethylene polymers in primary forms (up USD 150 million).

Trading partners

According to July’s trade balance results, China remains Brazil’s main trading partner, accounting for nearly one-third of Brazilian exports last month, with shipments totaling more than USD 10.7 billion - an 8.6 percent increase compared with July 2025.

The United States ranked second, accounting for 10.7 percent of Brazilian exports in July, down 5 percent from the same month in 2025. The decline does not yet reflect the effects of the US government’s new tariff hike, which took effect on July 22 and is expected to affect August sales, with data to be released in early September.

Brazil’s exports to Argentina also fell last month, declining by nearly USD 230 million, or 13.9 percent compared with July of last year. Although not directly related, this development comes at a time of renewed tensions between the governments of the two neighboring countries following successive attacks by Argentine President Javier Milei against Brazilian President Luiz Inácio Lula da Silva. The dispute led Brazil’s Ministry of Foreign Affairs to downgrade diplomatic relations with Buenos Aires.

Year-to-date

From January through July, Brazil’s trade balance recorded a surplus of USD 49 billion, with both imports and exports increasing compared with the same period last year.

Year-to-date figures (January–July 2026):

Exports: USD 218.6 billion (+10.5%)
Imports: USD 169.5 billion (+5.5%)
Total trade: USD 388.1 billion (+8.2%)
Trade balance: USD 49 billion surplus

Petrobras reported net income of BRL 52.4 billion (USD 10.4 billion) in the second quarter of 2026, up 97 percent from the same period in 2025. This is one of the highest quarterly results on record.

According to the company, the results were driven by record oil production of 2.7 million barrels per day, a refinery utilization rate of 101 percent, and export growth to nearly one million barrels per day.

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The high refinery utilization rate resulted in daily production of 509,000 barrels of S-10 diesel and 109,000 barrels of jet fuel.

Total refined product output reached 1.9 million barrels per day, representing a 5.6 percent increase from the first quarter of 2026.

As refined product production increased, imports fell by 40 percent from the previous quarter.

“The operational records we achieved in this second quarter led to one of the strongest quarterly financial results in Petrobras’ history,” said Fernando Melgarejo, Chief Financial Officer and Head of Investor Relations.

Investments

Petrobras invested BRL 26.7 billion (USD 5.3 billion) in the second quarter of 2026. Of this amount, 82 percent was allocated to the exploration and production segment.

Notable investments this quarter included the construction of the P-80, P-82, and P-83 platforms, which are scheduled to begin operations in 2027.

The fourth consecutive cut in the Selic rate, decided on Wednesday (Aug. 5) by the Monetary Policy Committee (Copom) of Brazil’s Central Bank, was well received by economic agents but is still considered insufficient to support industrial sector growth.

In a statement, the Federation of Industries of the State of Rio de Janeiro (Firjan) emphasized that the ongoing cycle of Selic rate cuts represents a positive sign for economic activity, but that the still-high level of the rate keeps credit expensive and delays investment.

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“The high cost of capital delays investment, hinders production modernization, and limits Brazilian companies’ ability to improve productivity and compete in domestic and foreign markets. This situation is reflected in the performance of the manufacturing sector, which grew by only 0.4 percent in the first half of the year, according to Brazil’s statistics bureau, the IBGE.”

Along the same lines, the National Confederation of Industry (CNI) noted that interest rates have remained restrictive for 55 months and that the Selic rate is 3.6 percentage points above the level indicated by the Taylor Rule, which estimates an appropriate rate at 10.4 percent. The rule is used to calculate an interest rate that helps control inflation without holding back economic growth.

“The real interest rate, at approximately 10 percent, is well above the equilibrium rate estimated by the Central Bank itself at 5 percent, indicating that there is room for more significant Selic rate cuts without compromising the fight against inflation.”

Among labor organizations, Força Sindical said the 0.25 percentage point cut in the Selic rate was insufficient. According to the labor federation, high interest rates make credit more expensive, curb investment, discourage consumption, and hinder job creation.

“We missed an excellent opportunity to promote a sharp reduction in interest rates, boost confidence in the productive sector, and further stimulate the economy.”

Outlook

Camilo Cavalcanti, a portfolio manager at Oby Capital, assessed that the Monetary Policy Committee maintained its message that the full extent of the interest rate cut cycle will be determined by incoming data, without any prior commitment, and reinforced the asymmetric balance of upward risks.

“At the end of the statement, Copom explicitly cited the de-anchoring of inflation expectations and the elevated risks surrounding the baseline scenario as reasons for ‘calm and caution’ in the conduct of monetary policy. Given the contrast between a more favorable current scenario and forward-looking communication that remains cautious, we assess that Copom is still leaving open the possibility of continuing the cycle of interest rate cuts at its next meeting.”

Copom

The Central Bank’s Monetary Policy Committee reduced the Selic rate - the Brazilian economy’s benchmark interest rate - by 0.25 percentage points, bringing it down from 14.25 percent to 14 percent per year.

This marks the fourth consecutive interest rate cut by the committee. The decision was made at a meeting held at the bank’s headquarters in Brasília.

According to the institution, the new gradual 0.25 percentage point reduction is consistent with the strategy of bringing inflation toward the center of the target range over the coming months.

Regarding the external environment, the Central Bank once again pointed to uncertainty surrounding armed conflicts in the Middle East and the monetary policies of some advanced economies.

The Monetary Policy Committee (Copom) of the Central Bank of Brazil on Wednesday (Aug. 5) cut the Selic rate - the Brazilian economy’s benchmark interest rate - by 0.25 percentage points, from 14.25 percent to 14 percent per year. The decision marks Copom’s fourth consecutive interest rate cut.

The Central Bank uses the Selic rate as a monetary policy tool to slow economic activity and help control inflation.

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According to the institution, the latest gradual reduction of 0.25 percentage points is consistent with its strategy of bringing inflation back toward the midpoint of the target range.

The inflation target set by the National Monetary Council (CMN) for the period beginning in January 2025 is 3 percent, with a tolerance band of plus or minus 1.5 percentage points - that is, from 1.5 to 4.5 percent.

“Without compromising its primary objective of ensuring price stability, this decision also helps smooth fluctuations in economic activity and foster full employment,” the bank said in a statement.

Regarding the external environment, the Central Bank once again pointed to uncertainty surrounding armed conflicts in the Middle East and the monetary policies of some advanced economies.

“This scenario calls for caution on the part of emerging economies in an environment marked by rising volatility in asset and commodity prices,” the institution noted.

Regarding the domestic outlook, the bank emphasized that the set of indicators released since the previous meeting suggests “a gradual moderation in economic activity, although it remains resilient, with mixed signals across sectors and a tight labor market.”

From June 2025 to March this year, the Selic rate remained at 15 percent per year, reaching its highest level in nearly 20 years.

The Monetary Policy Committee began cutting interest rates in March amid falling inflation. However, the war in the Middle East, which has pushed up fuel and food prices, is making further rate cuts more difficult.

Petrobras announced on Monday (Aug. 3) the discovery of a natural gas well in a high-potential deepwater area off the coast of Colombia. The deposit is located in the Sandia-1 exploration well, in Block GUA-OFF-0, in the Guajira basin. Sandia-1 is located 42 kilometers offshore, at a water depth of 1,251 meters.

The company had already discovered high-potential reservoirs near the new location. Sandia-1 is 18 km from the Sirius-1 well and 9 km from the Copoazu-1 well.

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Drilling of the well began on June 12 and reached final depth last Wednesday (29).

The consortium

Petrobras is engaged in oil and gas exploration and production in Colombia through its subsidiary Petrobras International Braspetro B.V. – Colombia branch (PIB-COL).

Exploration in the Guajira basin is conducted in a consortium with the Colombian state-owned company Ecopetrol. The Colombians hold a 55.56 percent stake in the consortium, and the Brazilians 44.44 percent. Even though it holds a minority stake, Petrobras is the operator of exploration activities in the block.

According to the company, the discovery “reinforces the gas potential in Colombia’s offshore area, adding volumes that will contribute to the region’s energy security.”

The Brazilian state-owned company also noted that its operations off the Colombian coast are in line with its long-term strategy, which aims to replenish oil and gas reserves through exploration in new frontier areas and partnerships with other companies, “helping to meet global energy demand during the energy transition.”

Petrobras around the world

In addition to Colombia, Petrobras is involved in oil production in other countries.

In Africa, the state-owned oil giant operates in Namibia, São Tomé and Príncipe, and South Africa. In the Americas, the company has a presence in Bolivia, Argentina, and the US.

Brazil recorded the fourth-fastest growth in international tourist arrivals from 2019 to 2025, according to the report Tourism Trends and Policies 2026 by the Organization for Economic Cooperation and Development (OECD). During this period, the number of foreign visitors increased by 46 percent, rising from 6.3 million to 9.3 million arrivals.

The survey compares countries’ performance in 2019-before the COVID-19 pandemic-with results recorded in 2025, illustrating the pace of recovery and growth in international tourism.

Brazil among top tourism performers

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With a 46 percent increase in foreign visitors, Brazil ranked among the top-performing countries during the period analyzed.

This performance placed Brazil ahead of major international tourism destinations, such as:

• Japan: 34% growth;
• Portugal: 20%;
• Spain: 16%;
• France: 12%.

In South America, Brazil also stood out. While tourist arrivals increased in the country, other nations in the region recorded declines during the period:

• Argentina: -23%;
• Peru: -22%.

Global recovery

The OECD report highlights that international tourism continues its recovery following the pandemic, driven by increased demand for travel, the restoration of connectivity between countries, and expanded investment in the sector.

According to the organization, tourism continues to play an important role in boosting economies, creating jobs, and promoting regional development across the countries analyzed.

Trend

Brazil’s international tourism authority Embratur noted that results from the first half of 2026 confirm the trend identified in the OECD report.

In the first six months of this year, Brazil welcomed 5.2 million international tourists, the second-highest number recorded for a first half of the year. Visitors contributed USD 5.6 billion to the Brazilian economy, a figure 12 percent higher than that recorded in the same period of 2025.

Embratur pointed out that this growth also reflects expanded efforts to promote Brazil abroad.

Among these initiatives are:

• participation in international trade shows;
• organization of press trips;
• organization of familiarization trips for tour operators and travel agents (famtours);
• promotional campaigns in strategic markets.

Brazil’s unemployment rate in the second quarter stood at 5.4 percent, reaching the lowest level ever recorded since 2012, when the historical series of the Continuous National Household Sample Survey (PNAD) began.

The result represents a decline from the first quarter of the year (6.1%) and compared to the same period in 2025, when it stood at 5.8 percent. The data were released on Thursday (Jul. 30) by the statistics bureau IBGE.

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In the second quarter, Brazil reached 103.1 million employed people – about 1.081 million more than in the first quarter. This figure is the highest ever recorded in any period covered by the survey.

The number of unemployed people stood at 5.9 million, down 10 percent (718,000 people) from the first quarter.

The study shows that during the three-month period from April to June, Brazil had 39.4 million workers with formal employment contracts – the highest figure in the entire history of the survey – and 13.6 million without formal contracts.

The proportion of informal workers in the employed population was 37.4 percent in the second quarter.

The average monthly income of Brazilian workers stood at BRL 3,738, the highest ever recorded for a second quarter. However, it is lower than the figure recorded in the first quarter of 2026 (BRL 3,765).

Despite a record-low unemployment rate during the period, income remains stable, according to research analyst William Kratochwill, because new hires typically earn wages that are average or below those of other workers.

High interest

The data pointing to a strong job market coincide with a period in which Brazil is experiencing a high benchmark interest rate – the Selic – set by the Central Bank, currently at 14.25 percent.

IBGE analyst William Kratochwill notes that the labor market itself creates a virtuous cycle, mitigating the impact of high interest rates on employment.

“When more people are employed, consumption increases, as do orders and production. The labor market itself may be contributing to companies continuing to hire,” he said.

He points out that one of the effects of the economic upturn can be seen in the number of discouraged individuals – people who were not even looking for work because they believed they would not find it – which stood at 2.3 million, down 14.7 percent (365,000 fewer) compared to the first quarter.

The survey

IBGE’s PNAD tracks labor market trends for people aged 14 and older and takes into account all forms of employment, including formal and informal work, temporary positions, and self-employment.

Only those who actively sought a job within 30 days prior to the survey are considered unemployed. The survey visits 211,000 households across all Brazilian states and the Federal District.

Passengers arriving in Brazil by plane with goods that must be declared to the Federal Revenue Service will be able to clear customs more quickly. The agency has adopted a system that automatically processes part of the Electronic Traveler Goods Declarations (e-DBV), eliminating the need for in-person processing in many cases before leaving the airport.

The new process went into effect on Monday afternoon (27) and initially applies to international air travelers.

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According to Brazil’s Federal Revenue Service, the measure is part of the modernization of customs control and aims to speed up unloading operations without reducing inspection capacity.

What’s new

Until now, travelers who filled out the e-DBV to declare goods brought from abroad typically had to go to the customs office to have their declaration reviewed before leaving the arrivals area. With the new system, this is no longer necessary for some travelers.

After the declaration is submitted, the Federal Revenue Service’s system automatically reviews the information. If the transaction is deemed low-risk, the declaration is registered immediately, and the passenger can proceed to the airport exit without going through in-person processing.

Cases requiring verification will continue to be forwarded for review.

Brazil ended June with a net gain of 145,161 formal jobs. The result for the month stemmed from 2,220,131 new hires and 2,074,970 terminations, according to data released on Wednesday (Jul. 29) by the Ministry of Labor and Employment.

The total number of formal jobs last month stood at 48,032,308, representing a 0.30 percent increase compared to the previous month’s total. Over the past 12 months, the net gain has totaled 942,854 jobs.

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All five major economic sectors posted positive hiring results in June. Services ended the month with a net gain of 74,514 jobs, while agriculture and livestock recorded a net increase of 22,898 jobs. Retail added 19,177 jobs, manufacturing added 4,438, and construction posted a net gain of 14,136 formal jobs.

Wages

The average real starting wage in June stood at BRL 2,404.34, up BRL 16.90 in real terms from the previous month.

Young people aged 18 to 24 accounted for 100,597 new jobs, while those aged 17 and under accounted for 24,833. The 25-to-29 age group posted a net gain of 13,007 jobs, and workers aged 30 and older recorded a net increase of 6,724.

Dark brown workers accounted for 106,176 jobs, while white and black workers totaled 28,636 and 20,199, respectively.

Jobs

Despite the positive result, the figures represent a decline from the same period last year, when 161,999 jobs were created.

Minister of Labor and Employment Luiz Marinho attributes the decline in job creation to Brazil’s Central Bank’s interest rate policy, which is contracting the economy.

The bank has been gradually reducing the economy’s benchmark interest rate, the Selic rate. At its latest meeting, the monetary authority cut the interest rate by 0.25 percentage points, bringing it to 14.25 percent per year.

The minister also attributed the results to the tariffs imposed by US President Donald Trump on various Brazilian products and to international conflicts.

The Mercosur–Singapore agreement takes effect next Saturday (Aug. 1) and should gradually reduce or eliminate tariffs between Singapore and the South American bloc.

The agreement guarantees zero tariffs on all Brazilian exports to Singapore. The agreement also establishes common criteria for trade operations.

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In addition to reducing tariffs, the pact expands access to the services market, encourages investment, and includes a specific chapter on e-commerce – the first negotiated by Mercosur with a partner outside the region.

The agreement with Singapore has been in effect in Uruguay since March and in Paraguay since February.

In 2025, trade between Brazil and Singapore reached USD 10.7 billion. Brazilian exports totaled USD 7.4 billion, resulting in a trade surplus of USD 4.1 billion. Among the main products exported are fuel oils, machinery, and beef, pork, and poultry.

The Brazilian government has made manuals available to provide guidance to exporters, importers, and foreign trade operators. They can be found on the Siscomex Portal.

Included are the rules for applying tariff preferences, the criteria for determining the origin of goods, and the procedures required to conduct foreign trade operations.

The accord was signed in 2022, and the Brazilian government’s expectation at the time was to increase the GDP by BRL 28.1 billion by 2041.

Negotiated since 2018, the agreement with Singapore is likely to boost Mercosur’s exports to the Asian country by USD 500 million per year.

Petrobras reported that total oil and gas production (crude oil, natural gas liquids, and natural gas) reached a record high of 3.34 million barrels of oil equivalent per day in the second quarter of 2026, 14.1 percent higher than in the same quarter last year and 3.4 percent higher than in the first quarter of 2026.

According to the company, this performance was driven by improved efficiency at the Maria Quitéria floating production unit in the Jubarte field, the Alexandre de Gusmão and P-78 units in the Mero field, and the start of production from the FPSO P-79 in the Búzios field.

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The company reported that ten new producing wells began operation during the quarter, including four in the Campos Basin and six in the Santos Basin.

Exports

Higher production boosted exports to approximately 1 million barrels per day, while oil imports fell to 89,000 barrels per day in the second quarter, the lowest volume since the pandemic began.

During the same period, the refinery utilization rate reached 101.2 percent.

The company noted that, given the war in the Middle East and fluctuations in global oil prices, increased utilization of its refining capacity “has been essential to expanding the supply of refined products in the domestic market.”

Domestic market

Domestic sales remained at a level similar to that of the first quarter, as higher sales of diesel and LPG offset lower consumption of other products.

China has taken another step toward expanding the entry of Brazilian products into its market by providing the necessary procedures for exporting frozen fruit and fruit pulp produced in Brazil.

The measure allows interested Brazilian companies to begin the authorization process to sell these products to China.

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According to the Brazilian Ministry of Agriculture, the General Administration of Customs of China has incorporated into its system the health certificate template that will be required for Brazilian exports of frozen fruit and fruit pulp.

“As a result, interested businesses can now apply for registration through the China Import Food Enterprise Registration system, a mandatory step for accessing the Chinese market,” the ministry reported.

The authorization applies to products derived from fruit species already recognized as food by Chinese authorities. These include açaí, mango, guava, pineapple, and passion fruit, as well as other fruits permitted for human consumption in China.

Under Chinese regulations, fruits that have not yet been recognized as food remain subject to specific regulatory procedures outlined in local legislation governing novel foods.

Guidelines

Registration in the Chinese system must be completed directly by the exporting company, which is responsible for submitting the required documentation.

After review and approval by the Chinese authorities, the company receives a registration number, which is required to ship goods to the Asian country.

Exports must also be accompanied by the official health certificate agreed upon between Brazil and China.

Before beginning the registration process, the Ministry of Agriculture advises exporters to review the requirements and procedures established by the Chinese authorities.

Once China’s General Administration of Customs has approved the registration and the competent Brazilian authority has issued the certificate, sales may proceed as per the applicable requirements.

Brazilian exports reached an all-time high in June, contributing to an improvement in the country’s external accounts.

According to statistics released on Tuesday (Jul. 28) by Brazil’s Central Bank, the current account deficit stood at USD 2.3 billion in June, less than half the USD 5.2 billion deficit recorded in June 2025.

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The reduction in the deficit was driven mainly by the performance of the trade balance. The trade surplus reached USD 8.8 billion in June this year, compared with USD 5.2 billion in the same month last year.

On a year-over-year basis, the trade surplus increased by USD 3.6 billion.

Exports of goods totaled USD 36.4 billion, the highest figure in the Central Bank’s historical series. This result represents a 24.8 percent increase compared with June 2025. Imports also rose, reaching USD 27.6 billion, a 15.3 percent increase over the same period.

Despite the improvement in the trade balance, the services account deficit increased by USD 0.7 billion compared with June last year, totaling USD 5.1 billion.

The result was primarily influenced by higher net expenditures on international travel, transportation, and telecommunications, computing, and information services.

In the 12-month period ending in June, the current account deficit totaled USD 61.4 billion, equivalent to 2.46 percent of gross domestic product (GDP). In June 2025, the cumulative deficit stood at USD 75.5 billion, or 3.52 percent of GDP.

Investments

Foreign direct investment (FDI) in the country recorded net inflows of USD 9.1 billion in June, compared with USD 3.1 billion in the same month last year. Over the 12-month period, cumulative FDI reached USD 89.3 billion, equivalent to 3.58 percent of GDP.

Portfolio investments, meanwhile, recorded a net outflow of USD 0.6 billion in the month. There was a net withdrawal of USD 2.2 billion from stocks and investment funds, partially offset by inflows of USD 1.6 billion into domestic securities.

Reserves

International reserves closed June at USD 367.6 billion, a decrease of USD 3.6 billion compared with May. According to the Central Bank, exchange rate fluctuations among the currencies that make up the reserves, as well as dollar sales in the spot market, contributed to the decline.

On Monday (Jul. 27), the Brazilian government filed a request for consultations with the United States through the World Trade Organization’s (WTO) dispute settlement system, challenging two tariff measures adopted under Section 301 of the US Trade Act of 1974.

According to a statement released by the Ministry of Foreign Affairs, Brazil considers the tariffs to be unjustified and inconsistent with the obligations assumed by the United States under the General Agreement on Tariffs and Trade of 1994 (GATT 1994) and the rules governing the WTO’s dispute settlement mechanism.

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One of the contested measures stems from a Section 301 investigation into Brazil and imposed an additional 25 percent tariff on Brazilian products. The investigation examined issues such as digital trade and electronic payment services, preferential tariffs, the enforcement of anti-corruption legislation, intellectual property protection, access to the ethanol market, and efforts to combat illegal deforestation.

The second measure resulted from an investigation involving 60 economies and imposed an additional 12.5 percent tariff on Brazilian products. In this case, the investigation focused on the existence and enforcement of restrictions on the importation of goods produced, in whole or in part, with forced labor.

The request for consultations represents the first formal stage of the WTO dispute settlement process. At this stage, the parties seek to negotiate a solution to the dispute before a panel is established to review the case.

According to the Ministry of Foreign Affairs, the initiative seeks to challenge the consistency of the US tariff measures with multilateral trade rules.

Tariff hike

The new tariffs announced by the United States will affect Brazilian products worth USD 6.6 billion exported to the US market, according to the Ministry of Development, Industry, Trade, and Services.

The ministry estimates that the cumulative 37.5 percent surcharge will affect 16.5 percent of Brazilian exports to the US.

The affected products include machinery and equipment, various types of wood, fats and oils, footwear, furniture, and apparel.

The United States has released a list of 471 Brazilian products that will be exempt from the new 12.5 percent surcharge imposed over alleged failures to combat forced labor. Among the items excluded from the measure are coffee, oil, natural gas, fertilizers, lumber, orange juice, and açaí products.

The list was published on Thursday (Jul. 23) by the Office of the United States Trade Representative (USTR) and includes exemptions covering 20 major product categories.

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The new tariff took effect early Friday morning (24). For products not included on the list of exemptions, the additional surcharge will be added to the 25 percent tariff imposed by the US since Wednesday (22), raising the total tariff rate to 37.5 percent on some Brazilian exports.

What was left out

The list of exemptions includes products considered strategic to trade between Brazil and the United States, as well as inputs used by US industry.

Among the main exempt items are:

• coffee;
• petroleum and petroleum products;
• natural gas;
• fertilizers;
• wood and wood products;
• orange juice;
• açaí products;
• pesticides;
• leather and hides;
• pig iron;
• aluminum waste and scrap;
• semiconductor manufacturing equipment;
• certain medications and pharmaceutical ingredients;
• works of art, antiques, and collectibles.

Also excluded were various industrial inputs, minerals, metal waste, and products used in the technology and pharmaceutical industries.

How it works

The new surcharge was announced following an investigation by the US government under Section 301 of the US Trade Act.

According to the USTR, Brazil is among a group of countries that, in the US assessment, lack sufficient mechanisms to prevent the importation of products manufactured using forced labor.

Despite this, the US government decided to exempt hundreds of products from the tariff measure.

According to the agency, the exemptions take into account factors such as the importance of certain inputs to the US economy, existing trade commitments, and the specific characteristics of certain markets.

The International Monetary Fund (IMF) praised Pix as one of the main drivers of the transformation of the Brazilian financial system, but warned that the Central Bank needs financial and budgetary autonomy to maintain its supervisory capacity in light of the sector’s expansion.

The conclusions can be found in the Financial System Stability Assessment report, released Thursday (Jul. 23).

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The document, prepared in partnership with the World Bank following technical missions to Brazil from December 2025 to March 2026, states that the country’s financial system is resilient but faces challenges related to staffing shortages at supervisory agencies, legal constraints, and the need for institutional strengthening. The previous report of this kind was prepared in 2018.

Pix

According to the IMF’s assessment, Pix has established itself as a key tool for financial inclusion, increased competition, and the digitization of the Brazilian banking market.

Emerging digital banks, the text argued, have reduced concentration in the banking sector and continue to foster competition and efficiency, which has also led to lower credit rates.

The report highlights that the instant payment system has accelerated the digital transformation of the financial sector and driven the growth of digital banks.

At the same time, the authority warns of increased cyber risks and digital fraud, advocating for the strengthening of the system’s governance.

Among the recommendations are the adoption of an official oversight policy for PIx and the separation of the Central Bank’s operational and supervisory functions.

Autonomy

In addition to praising Pix, the IMF states that it is urgent to strengthen the Central Bank’s structure to ensure the stability of the financial system.

Brazil, the report says, should adopt measures to address staffing constraints in supervisory agencies and grant full budgetary autonomy to the Central Bank of Brazil, in addition to expanding legal protections for civil servants and updating legislation on the resolution of financial institutions.

In the IMF’s view, the progress made since the last review in 2018 has been significant, but obstacles that limit the monetary authority’s ability to act persist.

The authorities, the text goes on to say, have made substantial progress, but still face challenges – primarily stemming from staffing constraints, a lack of legal protection, and limitations on legal authority.

The IMF states that these limitations reduce the intensity of banking supervision and may increase reliance on self-regulatory bodies in the capital markets.

Despite these recommendations, the IMF concludes that the Brazilian financial system remains sound and capable of absorbing economic shocks.

The report highlights the importance of maintaining the inflation-targeting regime, robust institutions, and the continuation of structural reforms to preserve the country’s financial stability.

Response from the Central Bank

In a statement, the Brazilian Central Bank said it welcomes the report and noted that the document contributes to the improvement of economic and financial policies.

“The Central Bank thanks the technical teams at the IMF and the World Bank for the quality of their work, for the constructive dialogue maintained throughout the process, and for the high technical standard of the analyses presented in the reports.”

The Central Bank also highlights that the IMF recognized the progress made by the Brazilian financial system since 2018, the transformative role of Pix, and the need to strengthen the institutional framework to secure resources, rebuild the civil service workforce, and preserve supervisory capacity.

Ministry of Finance

Brazil’s Ministry of Finance also issued a statement noting that Brazil had the second-largest upward revision in growth projections among G20 economies. The IMF expects Brazil’s gross domestic product to grow 2.4 percent in 2026. The forecast for next year was also revised upward, reaching 2.2 percent.

The ministry further pointed out that the report acknowledges that the fiscal consolidation path proposed in the country’s Budget Guidelines Bill presented in April will lead to the stabilization of public debt.

The United States announced on Thursday (Jul. 23) the imposition of a new 12.5 percent tariff on Brazilian products, alleging that Brazil has not adopted effective mechanisms to prevent the import of goods produced using forced labor. The measure took effect on Friday (24).

The new tariff replaces the temporary 10 percent across-the-board rate that had been in effect since February and comes in addition to the 25 percent surcharge on Brazilian products that took effect on July 22. As a result, some of Brazil’s exports to the US market may be subject to tariffs of up to 37.5 percent.

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The decision was made by the Office of the United States Trade Representative (USTR) following an investigation conducted under Section 301 of the Trade Act of 1974.

Rationale

According to the US government, Brazil is among 54 countries that neither prohibit nor effectively monitor the import of products manufactured using forced labor.

In the USTR’s assessment, this failure creates an unfair competitive advantage by allowing the circulation of goods produced with forced labor at lower costs.

US Trade Representative Jamieson Greer stated that the practice harms US companies and workers.

“The failure of our trading partners to address the importation of goods made with forced labor is unacceptable. This forces American workers to compete on an uneven playing field,” Greer said in a statement.

Products

The report states that, between 2021 and 2025, Brazil imported products linked to forced labor in five sectors:

• aluminum;
• cotton;
• electronics;
• lithium batteries;
• tobacco.

According to the USTR, these products could enter the Brazilian market at artificially low prices and subsequently affect the competitiveness of domestic exports.

The document also notes that, although Brazil participates in international agreements to combat forced labor and maintains the so-called “Dirty List of Slave Labor,” the United States considers the country’s mechanisms insufficient to prevent the importation of these goods.

Countries

The investigation covered 60 US trading partners.

In addition to Brazil, 53 other countries were subject to the 12.5 percent surcharge, including China, Argentina, Australia, Japan, India, the United Kingdom, and South Africa.

Brazilian reaction

In a statement, the Brazilian government criticized the new 12.5 percent tariff imposed by the United States and described the measure as “arbitrary” and “unjustified.” According to the Brazilian government’s Secretariat for Social Communication (Secom), Brazil provided the US government with information on its legislation and enforcement mechanisms to prevent the importation of products associated with forced labor, while also highlighting the country’s international recognition for combating forced labor.

The statement also notes that the government intends to invoke the mechanisms provided for under the Reciprocity Act and bring the case before the World Trade Organization’s (WTO) dispute settlement system.

While considering a diplomatic response, Brazil is maintaining measures to support exporters affected by US tariffs through the “Plano Brasil Soberano” (Sovereign Brazil Plan) initiative, which provides credit lines and incentives to access new markets.