Brazil’s State Companies Lost More in Six Months Than in Any Full Year on Record

Rio Times · Brazil

Brazil’s state-owned companies lost more money in six months than in any full year since the central bank started counting. The names doing the losing are not the ones most foreign investors would guess: Petrobras and the state banks are not even in these figures.

And the government’s own forecast, published in February, had them in surplus.

A six-month loss bigger than any full year on record

Brazil’s federal state-owned companies ran a primary deficit of R$7.8 billion, about US$1.54 billion, between January and June 2026. The figure comes from the central bank’s fiscal statistics, and it is the largest half-year shortfall in a series that starts in 2002. It is also larger than the worst full year in that series, 2024, when these companies lost R$6.7 billion (US$1.32 billion) over twelve months.

A primary deficit is the gap between what these companies take in and what they spend, before interest on their debt. It matters because the government ultimately stands behind them, so the shortfall adds to what the public sector has to borrow.

Widen the lens to include companies owned by states and municipalities and the six-month figure rises to R$8.9 billion (US$1.75 billion). The Rio Times reported the five-month figure on that wider measure, R$7.4 billion, on 7 July; this is the completed half-year.

The companies most people think of are not in the count

This is the part that surprises people. The central bank’s measure of state companies deliberately excludes Petrobras, the oil group, and the large state financial institutions – Banco do Brasil, Caixa Econômica Federal and the development bank BNDES. The point of leaving them out is that their profits would otherwise disguise what is happening at everything else.

Eletrobras, the power utility, is not in the figures either, and not because of privatisation. The central bank has left it out since 2010, on the same grounds as Petrobras: it raises its own money in the market and is run like a listed company.

Its 2022 privatisation settled the question, but it was already outside the count.

What remains is a collection of service, logistics, IT and infrastructure firms. They are small individually and largely invisible to foreign investors, and together they are where the money is going.

What the government itself expects each company to lose

A decree issued on 12 February set out what each federal company was expected to do this year. The Finance Ministry withdrew and reissued most of those figures the next evening, having published them wrong the first time. These are the corrected numbers. They are gross figures for individual companies, offset by surpluses elsewhere, and the decree’s net projection for all federal state companies in 2026 is a deficit of R$1.074 billion (US$212 million), against a target that allows up to R$6.752 billion (US$1.33 billion).

—Correios — the postal service — R$9.101 billion (US$1.79 billion)

—Emgepron — the navy’s project management company — R$3.102 billion (US$611 million)

—Hemobras — the state maker of blood-derived medicines — R$967 million (US$191 million)

—Infraero — the airport infrastructure operator — R$655 million (US$129 million)

—Port of Santos authority — which runs Latin America’s busiest port — R$570 million (US$112 million)

—Companhia Docas do Pará — the port authority for Pará state in northern Brazil — R$313 million (US$62 million)

—Serpro — the federal government’s IT and data-processing arm — a surplus of R$285 million (US$56 million)

The government only expects to meet that target because two blocks of spending are left out of the calculation: up to R$10 billion (US$1.97 billion) for state companies with an economic and financial recovery plan, a clause written into the budget law because of Correios, and R$4.234 billion (US$834 million) of spending under the Novo PAC infrastructure programme. Add back the R$10 billion alone and the projected shortfall becomes R$11.074 billion (US$2.18 billion).

The forecast was not just wrong, it was the wrong way round

The same February decree projected that federal state companies would run a surplus of R$5.973 billion (US$1.18 billion) between January and April 2026. That projection is made on the government’s target basis, which leaves out spending it does not count towards its goal. The central bank’s actual figure for those four months, which counts everything, was a deficit of R$5.93 billion (US$1.17 billion).

The two are not measured the same way, so the distance between them – close to R$12 billion (US$2.36 billion) – is not a like-for-like miss. What it is not is a rounding error.

The government expected money to come in over those four months and it went out instead.

The comparison with a year earlier points the same way. On the central bank’s January-to-April measure, the shortfall more than doubled, from R$2.73 billion (US$538 million) in 2025 to R$5.93 billion (US$1.17 billion) in 2026 – a rise of 117 percent.

Why it matters when borrowing costs this much

Every real of state-company deficit adds to what Brazil’s public sector has to borrow. The central bank’s policy rate is 14.25%, so that borrowing is expensive, and the state-company line is one more claim on a budget already under strain.

For an investor the number itself is small against the size of Brazil’s public accounts. What it signals is harder to price: a set of companies whose losses the government did not see coming four months ahead, in a year when the fiscal arithmetic has very little room in it.

Frequently Asked Questions

How much did Brazil’s state companies lose?

Federal state-owned companies ran a primary deficit of R$7.8 billion, about US$1.54 billion, in the first half of 2026. That is more than they lost in any full year since the central bank series began in 2002.

Including state and municipal companies takes it to R$8.9 billion.

Does this include Petrobras?

No. The central bank’s measure leaves out Petrobras and the large state banks – Banco do Brasil, Caixa and BNDES – so that their profits do not disguise losses elsewhere.

Eletrobras is not included either. The central bank has excluded it since 2010, on the same grounds as Petrobras; it was privatised in 2022.

Why does it matter for investors?

Because these losses add to what the public sector has to borrow, and Brazil’s policy rate is 14.25%, which makes borrowing expensive. The sharper signal is that the government’s own February decree projected a surplus for January to April and the outcome was a deficit – and the two are measured differently, but the distance is close to R$12 billion.

Sources: Banco Central do Brasil – fiscal statistics, Rio Times – the five-month figure

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