Brazil and the New Populist Wave: Lessons from the Bolsonaro Years

In the corridors of Washington and the bustling squares of Bogotá and Buenos Aires, there’s a familiar ghost, sort of haunting Latin American politics. It isn’t only the specter of past dictatorships, but also a modern, almost caricatured, version of American populism that has found really fertile ground in a region that’s tired of economic stagnation, and of institutional decay too.

Monica de Bolle, a senior fellow at the Peterson Institute for International Economics (PIIE), notices the shift with an academic kind of rigor, and also with deep concern. In a recent wide-ranging conversation, she broke down the “Trumpification” of the South American far-right, where leaders like Javier Milei in Argentina and José Antonio Kast in Chile aren’t merely allies of Donald Trump, they are also stylistic clones of this new, deeply anti-democratic far-right movement that seeks to subvert the constitutional order — despite using elections to gain power.

THE MIRROR EFFECT

The recent elections in Colombia, where we saw the rise of a right-wing populist right after the pretty tumultuous time of leftist Gustavo Petro, are basically the newest proof of this kind of trend. For Monica de Bolle, it doesnt really have to mean there is some big change in ideology, more like a deep “disenchantment” with the center itself.

“What amazes me is the emptying of the center” she says, “people are so fed up that they are willing to vote for someone with the worst possible qualities just because they embody  the “the new” and  a populist discourse that hits the right notes.”

She argues that Latin America has become a "fertile region for populisms" of all stripes. Whether they call themselves left or right, the essence remains the same: a transactional, often coercive approach to power that bypasses established rules.

THE BRAZILIAN EXCEPTION?

Brazil, having already passed through four long years of Jair Bolsonaro — who is currently imprisoned for the crime of attempted coup d'état —, finds itself in a pretty singular place. While its neighbors are now out there trying on their own little “Trump-wannabes”, Brazil already took the medicine, and not in theory but in real life.

“I hope Brazil has actually learned some lesson from the Bolsonaro years,” Monica de Bolle says. “I’m terrified by the amount of people who still want a repeat show. We really don’t need to copy Colombia, Chile, or Argentina. They are getting their first brush with these cartoonish Trumpists; we’ve already had ours.”

It is always important to remember that Bolsonaro administration was marked by government instability, institutional conflicts, and a lack of strategic planning, which hindered the country's economic development and investment climate.

Monica de Bolle credits President Lula with handling the pressures coming from the present Trump administration, with all those tariffs and the diplomatic friction stuff, a little more deftly than Colombia’s Petro who keeps clashing with Washington, over and over.

Also, is important to point that, in Brazil, there’s been this heated back and forth since U.S. President Donald Trump’s suggested 50% tariff on Brazilian imports. Some political commentators keep saying the plan — publicly advocated by Bolsonarists, who wanted the US to impose tariffs on Brazil —, aimed at key areas like agribusiness, some industries and steel, ended up giving President Luiz Inácio Lula da Silva a boost inside the country. Now, the conversation turned into a defense of Brazilian interests, and the extreme right, which used to present itself to the Brazilian electorate as an ultranationalist force, is like Milei in Argentina, prostrate and determined to do whatever the US far-right wants. The problem is that this strategy did not sit very well with a large part of the Brazilian electorate. Meanwhile, analysts say Trump’s action doesn’t just come out of nowhere. They connect it to wider attempts to pressure BRICS states and to slow down, or even counter, the shift toward a more multipolar world. According to them, the tariffs could dampen Brazil’s economic pace a bit, but it probably won’t shove the country into a recession. The reasoning is that Brazil’s trade ties are pretty diversified, and if one door closes there’s still other markets they can approach, and that flexibility matters.         

A TRANSACTIONAL WORLD

De Bolle looks past the regional scene, and says theres a bigger global shift, like the US foreign policy just kind of walked away from diplomacy and now prefers raw back and forth dealmaking. “It’s all based on coercion and ‘tit-for-tat’”, she explains, sort of flat.

In this new order of things, countries are scrambling for any leverage they can find. China, for example, leans on its dominance over critical minerals to “strangle” US pressure, and somehow everyone is acting like that is totally normal. Canada and Mexico are also trying hard to find multilateral avenues, because they want something that shields them from Washingtons constant moods.

And Brazil? Monica de Bolle brings it home with a blunt comparison: “At the table where global powers are negotiating, their futures, some countries can put critical minerals or high-tech chips on the table. Brazil, for now, is basically just serving the coffee.”

THE AI FACTOR

The future, however, seems to carry a new disruptor, Artificial Intelligence. Monica de Bolle says that the effects of AI on jobs will not stay just a corporate matter, they’ll soon slide into a proper political firestorm. In the US, discontent around the cost of living, and the dread of technological displacement, are already nibbling at Trump’s support in the polls as the midterms draw near

Now, as Latin America keeps riding this populist carousel, the real question is if the region will keep stumbling between ideological extremes or if it will finally manage to assemble a stable, resilient center. For the moment, as De Bolle suggests, a lot of countries look set to “pass through the Calvary” of populist leadership before they really, and I mean, before they actually figure out what they want to build for their future.

IG4 Capital Eyes Control of Raízen (RAIZ4) Through Brazil’s Largest Debt Restructuring

Private equity outfit IG4 Capital is looking to grab a controlling stake in Raízen (RAIZ4), Brazil’s top sugar and ethanol producer, tied to a huge 65 billion reais ($11.2 billion) extrajudicial debt reshuffling.

They’re trying to wrap up the buy of a 50.1% position by March 2027, as executives and documents suggest. This also kinda points to a wider shift where investment funds are taking on a more forceful, hands on part in messy corporate reorganizations in Brazil’s agribusiness and energy arenas, especially lately.

THE RESTRUCTURING PLAY

Raízen, that joint venture that’s between Shell and Brazil’s Cosan (CSAN3), is now dealing with the biggest extrajudicial recovery in the country. The restructuring plan would turn about 45% of the company’s debt into equity, and that basically means giving its creditors control of around 80% of the firm, or something close enough to that. IG4 is presenting creditors with a bunch of exit routes too, like immediate cash, debt for equity swaps, or letting them join a fund that would be managed by IG4 itself. And to actually lock in a controlling stake, IG4 would need to buy roughly 62% of the credits that are scheduled to be converted into equity.

"We want to be the '3G Capital' of special situations, focusing on a few large-scale deals," said Paulo Mattos, chairman and CIO of IG4 Capital. "We have the team and the resources to execute this, even after recently assuming co-control of petrochemical giant Braskem."

MARKET REACTION AND VALUATION

So, looking at Raízen current share price, around 0.42 reais, if you take a 50.1% stake it lands at roughly 2.2 billion reais, about $380 million. IG4 is planning to make the purchase happen using its third private equity fund plus some co-investors involved too. The market didn’t really go all in though, more like a cautious pause. Raízen shares have been bouncing around a lot across the last 52 weeks, and that kind of volatility hints at the operational and financial obstacles the company keeps facing. Raízen is basically a global heavyweight in bioenergy and in fuel distribution, so expectations are high, but execution has been a bit uneven.

STRATEGIC SHIFT

IG4’s interest in Raízen follows its successful entry into Braskem (BRKM5) and the sale of its logistics arm, Corredor Logística e Infraestrutura (CLI), to AD Ports. The firm emphasizes that its investment thesis prioritizes control or co-control to implement deep governance changes. "We don't believe in corporate turnarounds without control," Mattos said, adding that IG4 is seeking a collaborative approach with existing stakeholders and denies any intention of a hostile takeover.

Petrobras (PETR3; PETR4) Expands Energy Transition Strategy with Critical Minerals, SAF and Biofuels Investment

Petrobras (PETR3; PETR4) has been taking pretty significant steps over the past week, to kind of lock in its role in the global energy transition. The focus is on critical minerals, sustainable fuels and fiscal compensation, all of that at once.

PARTNERSHIP FOR CRITICAL MINERALS

Petrobras and the Brazilian Development Bank, BNDES, signed a protocol of intentions to collaborate on research and innovation, for critical and strategic minerals. The whole thing is meant to tackle technological bottlenecks within the supply chains for electrification, for batteries, and for clean energy. In Brazil there are major reserves of graphite, nickel, manganese, lithium, and aluminum too, and this partnership wants to take advantage of Petrobras’ research know-how so the country can plug into higher-value global production chains.

$1.2 BILLION BIOREFINERY INVESTMENT

The state-run oil giant also approved the final investment decision (FID) for a new $1.2 billion biofuels plant at the Presidente Bernardes Refinery (RPBC) in Cubatão, São Paulo. The unit will have a production capacity of 15,000 barrels per day, focusing on Sustainable Aviation Fuel (SAF) and renewable diesel. Scheduled to begin operations in 2030, the project aligns with Brazil’s "Fuel of the Future" law and international aviation decarbonization standards (CORSIA), marking a major milestone in the company’s 2026-2030 business plan.

DIESEL SUBSIDY REIMBURSEMENT

Petrobras received 752 million reais ($130 million) as the first installment of a government economic subsidy program for diesel. This payment covers the period between March 12 and March 31, following a measure that provided a 0.32 reais per liter aid. The subsidy program, intended to stabilize domestic prices, is expected to remain in effect until the end of 2026, though the government has signaled potential periodic reviews of the policy.

MARKET CONTEXT

The moves come as global competition for critical minerals intensifies, with G7 leaders recently agreeing to reduce dependence on China. Brazilian officials view this as a "window of opportunity" to demand local industrialization and processing investments. Meanwhile, the domestic transport sector remains cautious; while overall automotive sales are rising, truck registrations fell 3.24% in April compared to last year, with industry leaders looking to credit programs and trade fairs to unlock pent-up investment.

Raízen’s Vision for SAF Could Transform Brazil into an Aviation Fuel Superpower

In the 1970s, reeling from a global oil crisis, Brazil launched Pro-Álcool, a pioneering program that turned sugarcane into a national fuel staple. Today, as the world faces a dual crisis of geopolitical instability and climate breakdown, Brazil is dusting off its energy-sovereignty playbook for a new, high-stakes arena: the skies.

Sustainable Aviation Fuel (SAF) is no longer a distant green dream; it is becoming a geopolitical and economic imperative. As airlines grapple with the volatility of jet fuel prices, recently underscored by the bankruptcy filing of US-based Spirit Airlines, and stringent new mandates from the EU and UK, the search for a scalable, low-carbon alternative has reached a fever pitch.

A Sleeping Energy Giant

"We often suffer from 'stray dog syndrome' in Brazil," says Raphaella Gomes, CEO of Raízen-Geo Biogás S.A. and one of the country's most influential voices in energy. "We talk too little about our strengths. We treat biofuels as a 'green agenda' item, but it is actually a strategic pillar for industrial development and international trade."

Gomes argues that Brazil is uniquely positioned to fill a massive global supply gap. By 2035, global demand for SAF is expected to hit 50 billion liters. While the US market is likely to be served by domestic production incentivized by protectionist policies, the European and Asian markets are looking for suppliers. Experts predict a 15-billion-liter shortfall in a decade, a gap Brazil is eager to close.

Why Brazil?

The secret lies in what Gomes calls an "integrated agro-energy chain." Brazil isn't just producing fuel; it’s producing it with a carbon intensity that is hard to beat. Brazilian sugarcane ethanol, for instance, has a carbon footprint significantly lower than its international competitors.

But the revolution goes beyond sugarcane. The state of São Paulo has seen its biomethane production skyrocket, reaching 42.7 million cubic meters in 2025—a third of the national total. This "green gas," derived from agricultural waste and urban landfills, can be converted into SAF via "power-to-liquid" pathways.

"Aviation accounts for 2.5% of global CO2 emissions," Gomes explains. "Unlike cars, you can’t easily put a heavy battery on a plane. SAF is the only viable alternative for long-haul flights."

From Necessity to Opportunity

Brazil’s energy journey has always been driven by necessity. Today, the country still imports nearly 90% of its fertilizers and a significant portion of its diesel and liquefied natural gas (LNG). Recent disruptions produced by the US-Iran War and attacks on refineries in Qatar have only highlighted this vulnerability.

However, the same agricultural prowess that makes Brazil dependent on imported fertilizers also provides the "feedstock" for the future. From corn ethanol in the Mato Grosso heartland to biomethane in the outskirts of Campinas, the raw materials for a cleaner sky are already being harvested.

As the Pro-BioQAV (Programa Nacional de Combustível Sustentável de Aviação, in english "National Sustainable Aviation Fuel Program") mandate kicks in 2027, requiring a 1% reduction in aviation emissions, Brazil is moving from intention to action. The goal is to produce 2 billion liters of SAF by 2030. In a world hungry for energy security and decarbonization, Brazil’s "green pre-salt" might just be the fuel that keeps the global economy aloft.

Volkswagen also bets on Brazilian biomethane 

Ricardo Alouche, Vice President of Sales at Volkswagen Trucks and Buses, believes Brazil’s truck market will remain resilient throughout 2026 despite high interest rates, restricted credit conditions, and broader economic uncertainties.

According to Alouche, the federal government's Move Brasil financing program has been a key factor supporting truck sales. 

Looking ahead, Volkswagen is preparing several product launches for Fenatran 2026, Brazil’s largest commercial vehicle exhibition. The company also expects the event to focus more on technology, products, and customer relationships than on discounts and sales promotions, as many buyers are already bringing forward purchasing decisions due to favorable financing conditions.

On alternative propulsion technologies, Alouche highlighted growing interest in electric trucks, biomethane-powered vehicles, and hybrid solutions. All of this is an effort by the automaker to try to find solutions for the fluctuations in the fuel market, which affect those who work in the transportation sector. However, Alouche emphasized that adoption will occur gradually due to infrastructure limitations and cost considerations. Volkswagen is currently testing biomethane trucks in urban sanitation operations and advancing development of its hybrid Meteor truck, which is undergoing advanced testing.

Inpasa Secures R$1 Billion to Expand Corn Ethanol Production in Brazil

Inpasa, one of Brazil’s larger players in corn and sorghum based ethanol, has managed to pull in 1 billion reais (about $173 million) via its sixth debenture issue to help bankroll a big expansion of its industrial complex in Sinop, Mato Grosso.  

The plan is to more or less double the present production ability in Sinop, and, per a filing submitted to the Brazilian Securities and Exchange Commission (CVM), turn the area into the biggest ethanol production hub on Earth. This stretch project is set to add two new units, each one able to produce 1,350 cubic meters of ethanol every day.

SCALING UP RENEWABLES

The total investment for the new facilities is estimated at 1.64 billion reais. Inpasa plans to fund 97.3% of this amount through securities issuances, with the current 1 billion reais debenture offering covering approximately 60.8% of the total project cost.

Beyond biofuel, the new units will also produce corn oil and Distillers Dried Grains (DDGs), a high-protein byproduct used extensively in animal feed. This diversification allows Inpasa to maximize revenue from the grain processing chain in Brazil’s primary agricultural heartland.

FINANCIAL STRUCTURE

The debentures, coordinated by Itaú BBA, were offered exclusively to professional investors. The securities are simple, non-convertible, and unsecured (chirographic), but carry a guarantee provided by JOL Investimentos e Participações — Inpasa paid 3.1 billion reais ($538 million) in dividends in 2025 to JOL Investimentos e Participações, with its primary operational units located in Sinop and Nova Mutum (MT), and Dourados and Sidrolândia (MS).

Following the bookbuilding process, the final interest rate was set at 7.93% per year.

STRATEGIC GROWTH

Founded in Paraguay in 2006, Inpasa entered the Brazilian market in 2018 with its first plant in Sinop. Since then, it has rapidly expanded across the country, with operational units in the states of Mato Grosso, Mato Grosso do Sul, Goiás, Bahia, and Maranhão.

The expansion comes as Brazil sees a surge in corn-based ethanol production, driven by growing global demand for renewable energy and the increasing industrialization of the country’s record corn harvests. If successful, the Sinop complex will consolidate Mato Grosso's position as a global leader in the grain-to-fuel industry.

Why Eduardo Bolsonaro Was Sentenced to Prison by Brazil’s Supreme Court

Brazil’s Supreme Court on Wednesday sentenced former lawmaker Eduardo Bolsonaro, the son of former President Jair Bolsonaro — who is also imprisoned for attempted coup d'état —, to four years and two months in prison for attempting to coerce the judiciary through international pressure.

The 4-0 ruling by the court's first chamber found that Eduardo Bolsonaro used his personal ties with the administration of U.S. President Donald Trump to lobby for sanctions against Brazilian officials, specifically targeting Supreme Court Justice Alexandre de Moraes. The court characterized his actions as "coercion in the course of judicial proceedings," a crime involving the use of grave threats to favor the interests of a defendant, in this case, his father.

LOBBYING FOR SANCTIONS

The prosecution argued that Eduardo Bolsonaro, who moved to the United States in early 2025 and later had his congressional mandate revoked for absenteeism, actively sought to sabotage the Brazilian state. Evidence presented during the trial included his public boasts about influencing the Trump administration's decision to impose 50% tariffs on Brazilian exports and the revocation of visas for several Brazilian authorities.

"It is not the function of a Brazilian federal deputy to lobby abroad against their own country," the court noted, rejecting the defense's claim that his statements were merely "political alerts" rather than threats.

POLITICAL FALLOUT

The sentence, to be served in a semi-open regime, carries significant political consequences. Eduardo Bolsonaro has been declared ineligible for public office until 2038, effectively ending his aspirations to succeed his father as the leader of Brazil's conservative movement in the 2026 presidential race.

Eduardo Bolsonaro, who did not appoint a lawyer and was represented by a public defender, has dismissed the trial as a "political sham" and claimed the court failed to follow due process by notifying him via public notice instead of international legal instruments.

BROADER IMPACT

The conviction marks another blow to the political future of the Bolsonaro family and the Brazilian far-right. Jair Bolsonaro himself was recently placed on trial for an alleged coup attempt following his 2022 election loss. Analysts suggest that Eduardo's removal from the electoral field shifts the spotlight to his brother, Senator Flávio Bolsonaro, as the family’s primary political heir — Flávio's name, in turn, has already been linked to him in the Banco Master scandal, which donated millions of reais to the film Dark Horse, regarding Jair Bolsonaro.

The U.S. government’s use of the Magnitsky Act to sanction the Supreme Court minister Alexandre de Moraes, a move Eduardo claimed credit for, has created unprecedented diplomatic friction between Brasília and Washington, as the Brazilian government views the sanctions as an interference in its internal judicial affairs.

Brazil’s Pragmatic Path to Decarbonization: Beyond the Electric Bus Hype

In the global race to decarbonize urban fleets, the narrative is often dominated by a single, sleek solution: the electric bus. From London to Shenzhen, cities are betting billions on batteries. But in the bustling streets of Goiânia and the industrial heartland of São Paulo, a more "eclectic" and distinctly Brazilian revolution is taking hold. It is a story of pragmatism over dogma, where cow manure and sugarcane waste are challenging the supremacy of the charging plug.

At the end of March, Goiânia launched Brazil’s first fleet of articulated buses powered by biomethane, a renewable version of natural gas. Unlike fossil fuels extracted from deep underground, this "green gas" is harvested from urban waste, livestock manure, and vinasse, a pungent byproduct of ethanol production. It is what local industry insiders humorously call the "redneck pre-salt" (pré-sal caipira), a nod to Brazil’s vast offshore oil reserves, but found instead in the country's agricultural interior.

The ‘Real Brazil’ Reality Check

The shift toward biomethane isn't just about environmental idealism; it’s a response to the "Real Brazil." In São Paulo, the city with the country's largest electric fleet, ambitious electrification targets for 2028 are unlikely to be met. The hurdles are stubbornly concrete: an electric bus costs up to three times more than its diesel counterpart, credit for operators is scarce, and the electrical grid, managed by the embattled utility Enel, a company that is suffering from blackouts and a backlog of complaints, which have fueled pressure for the energy company to lose its concession, especially after blackouts affected thousands of people in São Paulo and caused losses in the billions of reais.

While an electric bus can cost 3 million reais, a biomethane version costs about 1.5 million. For cash-strapped operators still reeling from the pandemic’s impact on passenger demand, this price difference is the deciding factor. Furthermore, while an electric bus requires four hours to recharge and offers a reliable range of 200km, a biomethane bus can be refueled in 15 minutes and travel over 400km, more than enough for a full day’s service.

A Circular Revolution in Goiânia

Goiânia’s case is particularly striking. The state of Goiás does not have a single kilometer of natural gas pipeline. Yet, it is home to 30 major ethanol plants and a massive livestock industry.

By partnering with local producers to build a dedicated biomethane plant, the city has created a circular economy. The buses provide the guaranteed demand that makes the plant viable; the plant, in turn, provides the fuel that keeps the city moving.

The goal is to reach 500 biomethane vehicles by 2027, a 2.5-billion-reais investment that signals a major shift in how Brazilian cities view sustainability.

The ‘Eclectic’ Future

The consensus among manufacturers like Scania and Marcopolo, as well as industry bodies like ANFAVEA, is that the future of Brazilian mobility is not a "silver bullet" solution. Instead, it is "eclectic."

"There is no technology that will dominate," says Igor Calvet, president of ANFAVEA. "Brazil is surprisingly competitive because we have an incredibly renewable energy matrix, 90% of our electricity is clean. The ideal is to unite biofuels and electrification."

This hybrid approach allows for regional specialization. In the Amazon, where the grid is weak, biofuels might lead. In dense urban centers with shorter routes, electric buses remain the long-term gold standard due to their lower daily operating costs, roughly 5,000 reais a month in energy versus 25,000 reais for diesel.

The Certification Bridge

For companies that cannot yet physically access biomethane due to logistical gaps, a new market for "Biomethane Guarantee of Origin" certificates is emerging. Similar to carbon credits, these allow firms to neutralize their emissions by proving an equivalent volume of renewable gas was produced elsewhere in the country.

As Brazil navigates its transition, it is proving that decarbonization doesn't have to be a one-size-fits-all story. It is a mosaic of choices made city by city, route by route, and garage by garage. In the land of the "redneck pre-salt," the path to a greener future is being paved with a healthy dose of Brazilian ingenuity and a lot of agricultural waste.

85% Renewable and Rising: Brazil’s Rio Grande do Sul Unveils a Bold Energy Transition Strategy

Rio Grande do Sul, Brazil’s southernmost state, is positioning itself as a vanguard in the global energy transition, leveraging a highly renewable power grid and a strategic focus on domestic green hydrogen consumption to drive industrial decarbonization.

Speaking at the 6th Renewable Energy Forum in Porto Alegre, Rodrigo Huguenim, Energy Director at the State Secretariat for Environment and Infrastructure (SEMA), highlighted that 85% of the state's electricity matrix is already renewable, led by hydro, solar, and wind power.

GREEN HYDROGEN: THE "MISSING LINK"

The state is betting heavily on green hydrogen as a catalyst for sustainable industrial growth. Unlike other regions focusing primarily on exports, Rio Grande do Sul’s strategy centers on establishing a robust domestic market first.

"Our goal isn't just to export hydrogen as a commodity," Huguenim said. "We want to use it to decarbonize our local industry, such as our massive agribusiness and biodiesel sectors, adding value to our products before they reach international markets with a 'green' seal of approval."

In 2025, the state launched a 100 million reais ($17.3 million) tender to support private-sector green hydrogen projects. Four major companies — Be8, Rodoplast, Tramontina, and Âmbar Sul Energia — were selected to spearhead the state’s first production plants.

STRATEGIC PLANNING AND RESILIENCE

Rio Grande do Sul remains the only Brazilian state with comprehensive energy atlas, mapping all its renewable resources, including wind, biomass, solar, and a newly updated hydro-energy atlas released in 2024.

This data-driven approach is coupled with a renewed focus on infrastructure resilience following the catastrophic floods of May 2024. The state has commissioned a specialized study on energy transmission to identify "neuralgic points" and ensure the grid can support the influx of new data centers, battery storage, and hydrogen projects.

"There is no energy transition without transmission," Huguenim emphasized, noting that the state is working closely with federal agencies like the EPE (Energy Research Office) to coordinate long-term grid stability.

BIOMETHANE AND THE "GAS ERA"

The state also sees biomethane as a critical component of its "energy addition" strategy. Rather than simply replacing fossil fuels, Huguenim argues that the world is entering an era of gases where biomethane and hydrogen will complement existing sources to ensure energy security and cost-effectiveness.

With 40% of its GDP tied to agribusiness, Rio Grande do Sul has a ready-made market for green fertilizers produced via hydrogen and biomethane, potentially reducing the state’s dependence on imported methanol and nitrogen-based inputs.

IBGE Reports Strong Brazil Services Growth as Unemployment Remains Low

Brazil’s service sector output grew by a stronger-than-expected 1.2% in April, fully recovering from the previous month’s decline and signaling robust domestic demand in Latin America’s largest economy.

The result, released on today by the Brazilian Institute of Geography and Statistics (IBGE), significantly outperformed the 0.6% growth forecast as predicted by the Brazilian financial market. On a year-over-year basis, service volume expanded by 1.9%, marking the 25th consecutive month of positive growth.

DISSEMINATED GROWTH ACROSS SECTORS

All five major activities surveyed by the IBGE showed gains in April. The transport sector, which rose 0.9%, was the primary driver of the index. This growth was largely attributed to a 7.0% surge in air passenger transport, which rebounded following a sharp drop in ticket prices (down 14.45% in April after double-digit hikes in previous months).

"April brought a full recovery from the setback observed in March," said Rodrigo Lobo, research manager at the IBGE. "The movement was widespread; while all five sectors retreated in March, they all moved in the opposite direction and grew in April."

Other key sectoral highlights include:

• Tourism: Grew 4.1% in April, recovering a significant portion of the losses from the prior two months. The segment is now 11.2% above its pre-pandemic levels;
• Information and Communication: Rose 6.3% year-over-year, bolstered by strong revenues in software development, IT consulting, and internet hosting services;
• Passenger Transport: Advanced 2.6% month-over-month, though cargo transport saw a slight retreat of 0.9%.

REGIONAL DYNAMICS

From a regional perspective, 14 of Brazil's 27 federative units recorded growth. São Paulo, the country's industrial and financial heartland, was the most significant positive contributor with a 1.4% increase, driven by legal activities, air transport, and auxiliary financial services. Conversely, Rio de Janeiro (-3.6%) and the Federal District (-5.5%) saw the sharpest declines.

ECONOMIC OUTLOOK

The service sector, which accounts for approximately 70% of Brazil’s GDP, is currently operating just 0.3% below its historic peak reached in October 2025.

While the sector remains at an elevated level, economists note that its trajectory lacks a definitive trend, as it navigates a landscape of strong labor market conditions balanced against high interest rates. The accumulated growth for the first four months of 2026 stands at 2.2% compared to the same period last year.