Lula’s vetoes on offshore wind bill face backlash in Congress

Energy sector pushes to reverse vetoes that critics say favor polluting sources and could raise electricity bills

 

 

05/13/2025

With Congress set to vote on the issue on May 27, Brazil’s electricity sector is ramping up pressure on lawmakers to overturn President Lula’s vetoes of controversial sections of Bill No. 576/2021, which regulates offshore wind energy generation in the country.

At the heart of the dispute are Articles 22, 23, and 24, vetoed by Mr. Lula for addressing issues unrelated to the bill’s original intent—so-called riders. Initially designed to unlock Brazil’s offshore wind potential, the bill was altered during its passage through the Lower House and took on provisions far beyond its initial scope.

These included mandates for the compulsory contracting of gas-fired thermal plants that must operate at least 70% of the time, extensions of contracts for coal-fired plants, mandatory purchases of energy from small hydroelectric plants (PCHs) regardless of market demand, and the postponement of benefits for distributed generation projects, among others.

A study by consultancy PSR estimates that keeping the vetoed articles in place could cost Brazilian consumers R$545 billion in electricity bills by 2050—equivalent to an average 9% increase in rates.

“Beyond the direct impact on electricity bills, these riders throw the sector into disarray,” said PSR CEO Luiz Barroso. “They distort future auctions, increase power curtailments, affect free-market prices, damage institutional credibility, and hinder long-term energy planning. Worst of all, they consume the already narrow room in tariffs to fund needed investments, such as those related to climate adaptation.”

Luiz Eduardo Barata, president of the National Front of Energy Consumers, echoed the concerns, saying the unrelated provisions undermine current proposals aimed at reducing electricity costs.

“If Congress overturns the vetoes, consumers will see immediate rate hikes, and the legal framework for offshore wind, which should promote the energy transition, will instead subsidize dirty, expensive generation,” he said.

Aware of the growing pressure, the president’s office has launched a political effort to preserve the vetoes. The assessment is that giving in to economic interest groups would damage the government’s environmental credibility and raise energy costs for the public.

Should Congress reverse the vetoes, Brazil could end up with an offshore wind framework that paradoxically favors coal and gas, drives up rates, and undermines the country’s clean energy future.

ABEGÁS, the association representing gas distribution companies, supports keeping the gas-fired thermal plants in the bill, arguing that it would enable the expansion of infrastructure and the use of natural gas inland. The group claims these plants would provide predictability and ultimately reduce electricity costs for all consumers—both residential and industrial.

The wind sector, which originally proposed the bill, is pushing back. “Since when does the legislature decide what source of energy consumers will use, where it will be produced, and how much it will cost?” asked Marcello Cabral, head of new business at ABEEÓLICA, the sector’s association. “That should be the job of energy planners—the Energy Research Company (EPE) and the Ministry of Mines and Energy (MME), as the granting authority.”

While the wind power segment stands to benefit most from a regulatory framework, it sees other sectors taking advantage of the bill without accounting for the societal costs.

The Brazilian Small Hydropower Association (ABRAPCH) is also lobbying lawmakers to overturn the vetoes. Its president, Alessandra Torres, called the effort a “positive lobby,” arguing that there’s misinformation surrounding the issue and that studies support the provisions advocated by the segment she represents.

“Just because it’s an offshore wind bill doesn’t mean we can’t address other issues,” Mr. Torres said. “That’s always been normal over the years. Replacing 8 GW from the Eletrobras privatization law with 4.5 GW of small hydro is actually advantageous for consumers.”

Despite its green façade, the vetoed articles could increase Brazil’s greenhouse gas emissions by up to 25%, according to experts. In the case of coal, the bill calls for contract extensions for plants in southern Brazil through 2025. The controversy highlights an ESG dilemma: lawmakers argue that maintaining coal plants is necessary to preserve 36,000 jobs in Santa Catarina and Rio Grande do Sul.

On the other hand, experts point out that the proposal runs counter to Brazil’s environmental commitments just ahead of COP30. Luiz Fernando Zancan, president of ABCS—which represents companies in the coal supply chain—said keeping the plants online is essential for system reliability.

“During the 2023 blackout, it was the coal plants that kept southern Brazil’s outage to just 15 minutes, while the Northeast was out for nearly five hours,” Mr. Zancan said. “Without these rotating machines providing inertia, energy, power, and auxiliary services, the grid faces serious problems.”

*By Robson Rodrigues — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Brazil’s ethanol seeks bigger role in energy transition

At Paris event, sugarcane industry discussed plans to quadruple global biofuel supply by 2035

05/13/2025

Brazil’s sugar-energy industry is stepping up its international outreach to gain a larger role in the global energy transition. On May 14, the Brazilian Sugarcane and Bioenergy Industry Association (UNICA) will participate in the traditional NY Sugar Dinner in New York, where it will promote Brazilian ethanol as one of the fastest and most effective solutions for decarbonizing land and maritime transport.

“Ethanol has proven to be highly efficient, significantly reducing carbon emissions compared to fossil fuels,” said UNICA president, Evandro Gussi. Ethanol can cut carbon emissions by up to 90% relative to gasoline.

At a recent event in Paris, industry leaders discussed strategies to increase the global biofuel supply fourfold by 2035. In this scenario, Brazil is seen as having the greatest expansion potential through the conversion of degraded pastures into sugarcane fields, gains in crop productivity, and greater use of corn for ethanol production. “There are also significant investments in biomethane, which will further expand the sector’s energy offering,” Mr. Gussi said.

Brazil is the world’s largest sugarcane producer, with 621.88 million tonnes harvested in the 2024/25 crop year, and the second-largest ethanol producer, having posted a record output of 34.96 billion liters in the last season.

On the demand side, maritime transportation is expected to drive higher ethanol consumption. The International Maritime Organization (IMO) has set targets to cut net emissions from international shipping by 20% by 2030 and reach net-zero emissions by 2050. Companies like Compagnie Maritime Monégasque and Wärtsilä are developing ethanol-powered vessels.

Japan is also expected to boost demand. The country plans to blend 10% ethanol into gasoline by 2030 and 20% by 2040, increasing annual consumption from 1.5 billion liters to 4.45 billion liters. In March, UNICA and the Institute of Energy Economics, Japan (IEEJ) signed an agreement to enhance technical collaboration on sustainable biofuels.

According to Mr. Gussi, initiatives such as Brazil’s Green Mobility and Fuel of the Future programs have strengthened the image of Brazilian ethanol as a sustainable alternative.

*By Cibelle Bouças, Globo Rural — Belo Horizonte

Source: Valor International

https://valorinternational.globo.com

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Bosch taps Brazilian know-how as the world enters “Latin mode”

Volatile global economy pushes headquarters to learn from Latin American leadership

 

 

05/09/2025

Last year, several countries began facing inflation, high interest rates, and abrupt changes to their economic environment—conditions they were not used to. In response, Bosch’s global leadership invited the executive heading Latin American operations to Germany to explain how to navigate a region accustomed to volatility.

“When things started getting rough, they said, ‘Come tell us how you do business in Latin America,’” said Argentine Gastón Diaz Pérez, who has led Bosch in the region since 2022.

Mr. Peréz titled his presentation “Driving in the Fog.” It opened with a car approaching Copacabana, complete with palm trees, the beach, and Brazilian music. A click later, thick fog set in, blinding the road ahead. The car’s headlights turned on, revealing just a few meters of visibility. “Doing business in Brazil, you can’t see the long term,” he said. And in Argentina? “That would be the extreme—driving with the lights off,” he added. “The Germans loved it,” he recalled.

“We’re used to making decisions in volatile environments. That’s an advantage we have over the rest of the world, which is now uncomfortable,” said Mr. Peréz, pointing to U.S. trade policy as an example. “I think the world has shifted into Latin American mode.”

From Bosch’s perspective, this shift could play in the region’s favor. The world’s largest automotive parts maker has not only learned from the region’s economic instability but has also begun to recognize the potential of its Brazilian subsidiary, which combines technical expertise, a concentration of talent, and competitive advantages—enabling reduced reliance on the headquarters.

Bet on electric engines

One of the latest developments in talks between Bosch Brasil and global leadership is the potential production of electric motors for vehicles. If approved, the German multinational would begin manufacturing electric or hybrid engines in either Campinas (São Paulo) or Curitiba (Paraná), where its factories are located. The experience would start with heavy vehicles, Mr. Peréz said. These plans are under evaluation, he noted.

Further along is the plan to localize production of the ESP (Electronic Stability Program), a system that controls vehicle traction. Bosch has been manufacturing the mechanical component of this system in Brazil for about a decade. By the end of this year, it will begin producing the electronic component as well, which is currently imported from Mexico and Asia.

“This is a highly sophisticated computer. If a truck suddenly appears in front of you, the ESP system brakes and lets you swerve. You think you’re a great driver, but it’s the system that managed everything,” Mr. Peréz said. “Imagine the sensor data processing speed required to make a decision at 100 kilometers per hour.”

Latin America growth

The localization of parts and new projects have helped drive Bosch’s growth in Latin America. While results were less favorable in key global markets, the company’s revenue in the region rose 12% in 2024 to R$10.8 billion. Brazil accounted for 77% of that, or R$8.4 billion, with exports making up 21% of the total.

Mr. Peréz said the strong result stems from both improved competitiveness and growth in the automotive market, Bosch’s main business segment in the region.

“Cars are becoming more and more high-tech. That helps a company like ours, because we sell technology to the auto industry,” he said. Mr. Peréz expects continued growth as hybrid vehicle production increases—especially flex-fuel hybrids that can run on ethanol. “All automakers have announced they’ll launch one or more flex hybrid models in the coming years, and we’re happy about that.”

Mr. Peréz said the headquarters sees Latin America as a region that “grows below its potential.” “We all feel that Brazil’s GDP could be growing 6% or 7%, right? The region is far from global conflicts, geopolitically neutral, and still has a young population and many of the resources the world will need in the coming years,” he said.

Agribusiness potential

Food production is one of those key resources, Mr. Peréz noted. That’s why Bosch has been investing in agribusiness technology. In February, Brazil was selected as the group’s global research and development center for agriculture. “Our clients are here,” he said. The plan includes a R$200 million investment and the hiring of 100 professionals, including several who were previously working abroad.

Mr. Peréz underscored Brazil’s role in boosting global food output. “Besides favorable weather and abundant fresh water, we have three harvests a year. Latin America will be the world’s top food exporter in the coming years.”

As an example of new agricultural technologies, Mr. Peréz highlighted an intelligent sprayer developed using artificial intelligence. The system can distinguish between weeds and soybean plants, spraying herbicide only where needed—even at speeds of 20 kilometers per hour.

“Are we going to keep just producing grains and importing technology from others? Or are we going to take on the challenge of being both top producers and the place where the best technology is developed to make it all happen?” he asked.

*By Marli Olmos — São Paulo

Source: Valor International

https://valorinternational.globo.com

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Petrobras expected to post higher Q1 profit on stronger output

Analysts from BTG, UBS BB, and Ativa project net income of R$34.9bn from revenue of R$130bn

 

 

05/09/2025

Higher oil and gas production in the first quarter is expected to drive a year-on-year increase in Petrobras’s earnings, according to estimates gathered by Valor from three banks and brokerages. On average, analysts forecast a net profit of R$34.9 billion, net revenue of R$130 billion, and EBITDA of R$64.3 billion. If confirmed, those figures would represent increases of 47.25% in profit, 10.47% in revenue, and 7.16% in EBITDA compared to the same period last year.

The projections reviewed by Valor come from Ativa Investimentos, BTG Pactual, and UBS BB. Forecasts for net income ranged from R$24.7 billion (Ativa) to R$41.3 billion (BTG), while revenue projections spanned from R$121.2 billion (Ativa) to R$137.3 billion (BTG). EBITDA estimates ranged from R$60.7 billion (Ativa) to R$67.2 billion (BTG).

In the first quarter, the state-controlled oil company reported production of 2.77 million barrels of oil equivalent per day, up 5.4% from the first quarter of 2024.

BTG Pactual analysts Luiz Carvalho, Pedro Soares, and Henrique Pérez noted that, following the market’s negative reaction in the fourth quarter—mainly due to higher capital expenditures—investors remain focused on how spending is evolving. Rising capex, they cautioned, could limit future dividend payouts.

According to BTG, lower investment levels combined with higher production should be key to a recovery in Petrobras’s share price. The analysts also said the company is likely to benefit from better refining margins and lower operating costs due to improved efficiency and fewer maintenance shutdowns.

A separate report from UBS BB, authored by Matheus Enfeldt, Tasso Vasconcellos, and Victor Modanese, emphasized that “the big question for the quarter is capex.” The report noted that the key issue is how capital spending will influence dividend expectations, and flagged a particular risk in Q1 results due to the rollover effect of investments made in the fourth quarter of 2024.

Santander analysts Rodrigo Almeida and Eduardo Muniz said they expect EBITDA growth to be driven by higher output, lower lifting costs, and stronger refining margins. However, they foresee weaker results in the gas and power segment, primarily due to a $283 million charge tied to a legal settlement with EIG Energy. In March, Petrobras agreed to pay $283 million—without admitting fault—to settle a lawsuit filed by the U.S. firm, which claimed losses linked to its investment in the FIP Sondas fund managed by Sete Brasil. Sete Brasil filed for bankruptcy after Petrobras canceled contracts for exploration rigs.

Santander’s estimates, provided in U.S. dollars, project first-quarter net income of $5.393 billion, up 12% from a year earlier. The bank expects net revenue of $20.621 billion and adjusted EBITDA of $11.359 billion—down 13% and 9%, respectively, compared to the first quarter of 2024.

*By Rafael Rosas, Valor — Rio de Janeiro
Source: Valor International
https://valorinternational.globo.com
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Embraer eyes Chinese market as order backlog hits record high

Brazilian planemaker sees opportunity amid global supply constraints, trade tensions

05/07/2025

Global turbulence caused by U.S. President Donald Trump’s trade policies and ongoing supply chain issues in the aviation sector have opened new opportunities for Brazilian aircraft manufacturer Embraer, particularly in Asia, according to the company’s CEO, Francisco Gomes Neto.

Mr. Gomes told Valor that rising global demand for aircraft could bring the company’s commercial jet deliveries close to 100 units by 2026—levels last seen before a wave of industry crises.

Embraer posted R$6.4 billion in revenue in the first quarter, the highest since 2016 and a 44% increase year over year. Net income reached R$434 million, up 204.1%. The company’s backlog currently stands at $26.4 billion, the largest in its history.

Shares rose 0.8% on Tuesday (6) to R$66.46, bringing the 12-month gain to 93%, according to Valor Data.

Asia has emerged as a key region for Embraer’s expansion, particularly China—the world’s second-largest aviation market behind the U.S. “We see huge potential for the E2 [Embraer’s new-generation jet], which fits right between Comac’s models,” Mr. Gomes said, referring to the Chinese state-owned competitor. “Comac wants to protect its market, but we are working directly with customers.”

To strengthen its presence in China, Embraer recently hired Patrick Peng, a former Airbus and GE executive, to lead business development efforts in the region.

While Comac offers aircraft with seating for either 80 or over 160 passengers, Embraer’s jets range from 110 to 146 seats. The company already operates a fleet of around 90 aircraft in China, mainly ERJ-145s and E190s.

Meanwhile, Boeing—Embraer’s American rival—has taken a direct hit from the U.S.-China trade dispute, with President Xi Jinping’s government halting deliveries of Boeing aircraft to Chinese buyers. The decision, affecting roughly a quarter of Boeing’s production, triggered a sharp drop in the company’s stock. Boeing executives have since broken protocol by publicly confirming they are seeking alternative buyers for those jets.

Mr. Gomes emphasized that Embraer’s presence in Asia predates recent trade conflicts. This year, the company marks 25 years of operations in China. Beyond China, Embraer delivered its first E195-E2 jet in April to Mongolia’s Hunnu Air, which ordered two aircraft for routes to Beijing—a move Mr. Gomes says will help showcase the model within China.

“Embraer is also in dialogue with governments. China mainly imports commodities from Brazil and exports electric vehicles and mobile phone components. We’ll be part of a Brazilian trade mission to China this May,” the CEO said.

He noted that persistent supply chain disruptions continue to delay deliveries of larger aircraft, with lead times exceeding five years in some cases for models from Boeing and France’s Airbus. This bottleneck, combined with soaring demand for air travel, is pushing airlines to explore alternatives to wide-body jets.

Embraer gained attention last year when American Airlines signed a deal to purchase up to 133 E175 jets, a contract valued at over $7 billion. Meanwhile, Boeing continues to grapple with the fallout from repeated issues with its flagship 737 Max model.

Despite a favorable demand environment, Embraer is not immune to global economic headwinds. The company recently warned investors that a 10% U.S. tariff on Brazilian imports could reduce its EBIT margin by as much as 0.9 percentage points this year.

The executive jet segment—where components are shipped from Brazil to the U.S. for final assembly—will bear the brunt of the impact. The company is implementing cost-cutting and efficiency measures to offset the tariff burden.

Nevertheless, Embraer maintained its 2025 delivery forecast: 145 to 155 jets in the executive segment, and 77 to 85 jets in the commercial segment.

While next year’s targets have yet to be released, Mr. Gomes said he sees room to deliver between 90 and 100 commercial jets in 2026, with the potential to surpass that level in 2027. The company last hit that volume in 2017, before the pandemic and the collapse of its proposed commercial aviation joint venture with Boeing—a dispute resolved only in 2024 through arbitration, which awarded Embraer $150 million in compensation.

Looking ahead, the CEO expressed optimism about securing a defense contract with India for the KC-390 military transport aircraft. Embraer is also seeking to expand the model’s presence in the U.S. The company recently participated in U.S.-based trade shows and concluded a market strategy project with consulting firm Oliver Wyman.

*By Cristian Favaro — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Petrobras CEO piles on pressure for Equatorial Margin drilling

“Let’s drill, baby” statement in Houston comes amid push from officials and regional lawmakers for environmental license

 

 

 

 

05/07/2025

Petrobras President Magda Chambriard on Tuesday (6) enthusiastically defended exploratory drilling in the Amazon River mouth, part of an oil province known as Equatorial Margin,

Ms. Chambriard is in the U.S. attending the Offshore Technology Conference (OTC), a global industry event held in Houston. Valor obtained access to the video of her remarks. When contacted, the company confirmed the authenticity of the footage.

Standing alongside Amapá Governor Clécio Luís (Solidarity Party), Ms. Chambriard defended the project, which is under fire from environmentalists, arguing that the possibility of extracting oil in the region represents a major opportunity for the state and for the country.

“I celebrate the presence of Governor Clécio because he represents the opportunity we have in the Equatorial Margin and in the state of Amapá, where we truly believe we will have good surprises once we obtain the license to drill,” she said during a panel hosted by the Brazilian Petroleum and Gas Institute (IBP) at the event. Ms. Chambriard then added in English: “Let’s drill, baby!”

Beside the governor, Ms. Chambriard emphasized the importance of discussing the potential for a new oil reserve in the country at what “the world’s largest oil exploration and production conference.” She also assured that the drilling will be done safely and poses no risk to the population.

“The people of Amapá can rest assured that Petrobras operates responsibly, employing the highest technology for the benefit of the Brazilian population and Amapá society,” Ms. Chambriard said.

Along the same lines, Governor Luís thanked the invitation to join the Petrobras CEO at the conference and highlighted the potential economic impact of the exploration for the state.

“It’s very important to say that for us in Amapá, this is a turning point for our economy. We really want and really need the resources that would come from this oil. And we believe we can do this in a very safe way,” the governor declared.

The statement comes amid pressure from government officials and lawmakers from the North region for the Brazilian Institute for the Environment and Renewable Natural Resources (Ibama) to grant the environmental license for the exploration.

The main supporter of the proposal in Brasília is Senate President Davi Alcolumbre (Brazil Union of Amapá). Mr. Alcolumbre, a close ally of Governor Luís, even secured support from President Luiz Inácio Lula da Silva, who went so far as to say that Ibama “can’t keep up this stalling,” in a clear message opposing the stance of Environment Minister Marina Silva.

The minister maintains that the agency’s decision is technical. Ibama argues that the Amazonas River mouth region is environmentally sensitive, requiring strict licensing procedures.

In March, Ibama issued a technical opinion approving Petrobras’s plan for cleaning the drillship designated for exploration in the Equatorial Margin. The approval is a step that brings the company closer to securing the environmental license for exploratory activity in the region.

Besides Amapá, the Equatorial Margin includes ares offshore of the states of Pará, Maranhão, Piauí, Ceará, and Rio Grande do Norte.

*By Caetano Tonet — Brasília

Source: Valor International

https://valorinternational.globo.com

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Informal employment in Brazil hits lowest rate since pandemic

Economists see trend continuing despite expected slowdown

 

 

 

05/07/2025

With the exception of 2020—when the onset of the pandemic triggered a wave of layoffs that hit informal workers hardest—the share of informal workers in Brazil fell to its lowest level in the historical series of the Continuous National Household Sample Survey (PNAD Contínua) in the first quarter. A strong start to 2025 in formal job creation has led economists to revise their projections and suggests that informality may continue to shrink in the coming months, even with an anticipated economic cooling in the second quarter.

In the first quarter, the unemployment rate measured by PNAD rose to 7% from 6.6% in the fourth quarter of 2024. However, seasonally adjusted, the rate dropped 0.1 percentage point to 6.5%. Informal workers accounted for less than 38% of the labor force—excluding the pandemic period, this was the lowest level on record. At the time, the preservation of more formal jobs skewed statistics, with informality dipping to 36.5% in the second quarter of 2020 and average real income peaking, a level only surpassed last year. The share of informal workers rose again the following year, surpassing 40% in the second quarter of 2021, but fell back below that threshold in the same period of 2022.

In March, the number of informal workers declined for the fifth straight month, based on seasonally adjusted data from LCA 4Intelligence. Meanwhile, formal employment rose for the 16th consecutive month, accelerating recently, fueled by stronger-than-expected job creation. The General Register of Employed and Unemployed (CAGED) recorded a net gain of 71,500 formal jobs in March. While this was below analysts’ expectations, it helped offset February’s surprisingly high figure, when 431,000 jobs were added.

Growth and reforms

Fernando Honorato, chief economist at Bradesco, said the strong formal job market reflects Brazil’s solid economic growth—GDP has expanded by 3% or more for four consecutive years since 2021. “There were major stimulus measures during this period, from both the federal government and subnational entities [states and municipalities], which spurred activity. As unemployment falls, formalization increases, because employers must offer better conditions than informal work to attract workers. This happened in the previous growth cycle and is happening again,” he explained.

Since that last favorable period, a series of reforms, innovations, and developments have transformed the economy and labor market, further supporting this trend, analysts say. “These are hard to separate from GDP growth effects. Joaquim Levy [former finance minister] once said we’d only see the real impact of the labor reform during a strong labor cycle. And the pandemic hit right after the reform,” Mr. Honorato noted.

Passed in 2017, the labor reform reduced the risk of lawsuits after dismissals—cases that often result in financial shocks and cause companies to shut down. As a result, businesses became more willing to hire formally, said Alessandra Ribeiro, head of macroeconomic analysis at consultancy firm Tendências.

Although the number of labor lawsuits rose again in absolute terms, exceeding 2 million in 2024, economist Bruno Imaizumi of LCA 4Intelligence pointed out that, relative to the employed population and the stock of formal workers, the share of lawsuits remains well below pre-reform levels. He believes the reform still gives employers more confidence by lowering legal risks.

“This helps smaller businesses survive and hire more,” he said.

New contracts

Ms. Ribeiro highlighted that the reform also paved the way for new types of formal contracts, such as intermittent and temporary work. “Today, these account for around 11% of formal hires in the CAGED data,” she said. Other developments also contributed to this trend, including credit and capital market reforms that expanded access to financing and indirectly pushed for formalization.

“Companies that go public or issue bonds need to be more formalized, provide more transparency, and minimize risks to be vetted by banks and investors,” she added.

Mr. Honorato said credit reforms have been a major incentive for formalization. “The creation of the TLP [Long-Term Rate], which opened space for corporate debit, and the collateral framework reform are among several changes that boosted capital markets and encouraged companies to formalize in order to benefit.”

Ms. Ribeiro also pointed to improvements in education and technology. Between 2000 and 2022, the share of working-age Brazilians with higher education nearly tripled from 6.8% to 18.4%, Census data shows. Additionally, digital platforms have facilitated job matching. “It’s not just ride-hailing and delivery apps, but all platforms that reduce the cost of connecting employers and job seekers,” she said.

MEI effect

Another factor is the rise of the “individual microentrepreneur” (MEI) model, which employed 6.7 million people in February. Though often viewed as a form of disguised employment—an issue now under legal scrutiny after Supreme Court Justice Gilmar Mendes suspended related cases—MEIs are counted as formal workers in PNAD statistics.

“Some app drivers and couriers are MEIs, as the government wants. It’s complicated, because many value their independence and flexibility. But there are also those who opt in to access the social safety net or credit programs,” said Rodolfo Tobler, an economist at the Brazilian Institute of Economics at Fundação Getulio Vargas (Ibre FGV).

Mr. Imaizumi of LCA believes that formal job growth could continue as long as the economy stays resilient, easing fears of a sharper downturn in 2025. LCA forecasts unemployment will remain stable this year at 6.6%, with 1.4 million formal jobs created—300,000 more than previously estimated. “That’s fewer than in the past three years, but still a significant figure,” he said.

Tendências has also revised its average unemployment forecast for 2025, lowering it from 6.9% to 6.6%. Its estimate for net formal job creation rose from 1 million to 1.5 million.

(Sergio Lamucci contributed reporting.)

*By  Marcelo Osakabe  — São Paulo

https://valorinternational.globo.com/

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MedSênior and Leve Saúde plan minority stake sales

Senior-focused health insurers seek investors to fund expansion

 

 

 

 

 

05/06/2025

Prevent Senior’s network includes 13 hospitals, 4 emergency care units, and 29 clinics, mostly in São Paulo — Foto: Divulgação
Prevent Senior’s network includes 13 hospitals, 4 emergency care units, and 29 clinics, mostly in São Paulo — Photo: Divulgação

Health insurers MedSênior and Leve Saúde, both focused on Brazilians over 60, are in talks with investment funds to sell minority stakes. While both companies have been growing rapidly, they plan to allocate the funds differently.

MedSênior, which already has Singapore’s sovereign fund Temasek as a shareholder since 2022, is considering a secondary offering in which the founding family would reduce its stake but retain control. Leve Saúde, on the other hand, is negotiating a capital raise of between R$300 million and R$500 million to expand its network of clinics and hospitals, Valor has learned.

Most health insurers in Brazil avoid the over-60 population, citing high medical costs, which has led to a shortage of plans for this age group. Currently, 7.7 million Brazilians over 60 have health coverage—15% of the total market—but they account for one-third of all medical expenses, according to consulting firm Arquitetos da Saúde, using data from the national health regulator ANS.

Yet Prevent Senior, MedSênior, and Leve Saúde—Brazil’s three leading senior-focused insurers—are defying that trend. Their loss ratios (medical costs relative to revenue) are well below the industry average, which closed 2023 at 83.8%.

In 2024, MedSênior posted a loss ratio of 56.7%—the lowest in the sector. Leve Saúde was close behind at 56.78%. Prevent Senior, after peaking during the pandemic, ended 2023 with a ratio of 83.1%, which fell to 74.7% in March—closer to historical levels.

Prevent Senior came under fire during the pandemic over allegations ranging from promoting unproven COVID-19 treatments to negligent care. Some cases were dismissed due to lack of evidence, while one investigation by São Paulo’s public prosecutor is still ongoing. No convictions have been issued. “Prevent Senior has always denied any wrongdoing,” the company said.

Over the past two years, a wave of unilateral cancellations by other insurers has driven many new clients to Prevent Senior, disrupting the balance between supply and demand.

Rapid growth

Between 2018 and 2024, MedSênior’s revenue jumped from R$193.8 million to R$2.1 billion. Net income reached R$297 million last year—more than twice that of Prevent Senior, despite the latter generating around R$7 billion in revenue. Leve Saúde, founded in 2020, grew from R$2.3 million in revenue to R$383 million by 2024. The company is still posting losses, due to its smaller scale (81,000 clients) and limited operating history.

Founders Maely Coelho (MedSênior) and Ulisses Silva (Leve Saúde) argue that serving older adults can be profitable. They entered this underdeveloped segment in response to Brazil’s aging population, which is expected to increasingly demand healthcare services. In 2023, 15.6% of Brazilians were aged 65 or older. By 2070, that figure is projected to rise to 37.8%, according to the Brazilian Institute of Geography and Statistics (IBGE).

Together, the three specialized insurers have about 850,000 members, including a small share of younger dependents. Their market share is still limited, considering the 7.7 million Brazilians over 60 with health plans.

Roughly half of those older members have employer-sponsored coverage, often retained after retirement from companies that allow former employees to keep their benefits. However, more employers are eliminating this option—even for retirees willing to pay out of pocket—creating an opening for insurers offering individual plans. These are scarce for all age groups and particularly rare for older adults.

Model focused on prevention

Prevent Senior, MedSênior, and Leve Saúde operate on a prevention-oriented model that emphasizes routine exams and chronic disease management—costs that are far lower than hospital stays or surgeries. In addition, services are offered through proprietary clinics and hospitals designed specifically for elderly care, which is more cost-efficient than outsourced provider networks.

Prevent Senior pioneered this model and remains the market leader, with nearly 600,000 clients—three times more than MedSênior. Its network includes 13 hospitals, 4 emergency care units, and 29 clinics, mostly in São Paulo. This year, the company plans to open two more hospitals, two new urgent care centers, and a clinic.

“Having an operation fully focused on this demographic makes a difference. These companies have deep expertise—their entire infrastructure and data systems are tailored for this audience. Industry data shows people over 60 account for 15% of the member base but 34% of medical costs. Yet these specialized players perform far better,” said Luiz Feitoza, a partner at Arquitetos da Saúde.

Most insurers struggle to maintain a dedicated division for older clients. Not surprisingly, sources say Prevent Senior received acquisition and merger offers from large insurers shortly before the pandemic.

Around the same time, investors were eyeing MedSênior, which ended up selling a 15% stake to Temasek in 2022. The capital raised—undisclosed—went to shareholders. This time, the new offering would again be secondary, and Temasek’s stake would not be diluted, people familiar with the matter said.

The Singaporean sovereign fund did not invest directly into the operation but opened doors for MedSênior’s expansion into new markets.

“We don’t need capital—we generate cash. But we’re a small operator from Espírito Santo, and it’s hard to break into São Paulo, for example. Once we say our partner is Temasek, everything changes. It gives us credibility. Temasek did a thorough due diligence process, which proves everything is in order,” Mr. Coelho said. “They’re a dream partner. They don’t interfere, they know we understand healthcare. They sit on the board and have helped us a lot with introductions,” he added.

MedSênior is now present in São Paulo, Rio de Janeiro, Minas Gerais, the Federal District (Brasília), Paraná, Rio Grande do Sul, and, more recently, Recife.

Founded during the COVID-19 pandemic in 2020, Leve Saúde is also growing rapidly. Sources said its capital raise—between R$300 million and R$500 million—will fund hospital acquisitions in its core market of Rio de Janeiro and expansion to other regions of Brazil. The company currently operates 11 clinics, which serve as patients’ first point of care.

Leve also has clients in small and mid-sized business plans (PME), a segment MedSênior has only recently entered. One of Leve’s strategies is to attract clients from other Rio-based insurers such as Assim Saúde, which is reportedly in talks to be sold, and Golden Cross, which will be shut down by the ANS in mid-May and must transfer its clients to other providers.

MedSênior and Leve Saúde declined to comment on the planned transactions. Prevent Senior also did not comment on past merger and acquisition offers.

*By Beth Koike — São Paulo

Source: Valor International

https://valorinternational.globo.com

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Selic expectations dip slightly, challenging COPOM’s strategy

Focus survey may signal broader revisions to market outlook on monetary tightening

 

 

 

05/06/2025

Analysts are starting to review forecasts, which could translate into a broader shift in the market's outlook
Analysts are starting to review forecasts, which could translate into a broader shift in the market’s outlook — Photo: Freepik

Economists surveyed in the Central Bank’s weekly Focus report now expect interest rates to end the year slightly lower—suggesting both a milder tightening cycle and an earlier start to rate cuts.

According to data released Monday by the Central Bank, the median forecast for the Selic rate at the end of 2025 fell from 15% to 14.75% per year.

While the revision is minor and unlikely to significantly impact the Central Bank’s inflation projections at this week’s monetary policy committee (COPOM) meeting, it could mark the beginning of a broader reassessment of the expected intensity of monetary tightening—a shift that may complicate the committee’s goal of gradually bringing inflation back to its 3% target.

Two main factors drove the lowered Selic projection. First, fewer economists now expect the benchmark rate—currently at 14.25%—to peak at 15% or more during this cycle.

The median forecast points to a 0.5 percentage point hike at this week’s Copom meeting, followed by a smaller 0.25 point increase in June. But a growing number of analysts believe the tightening will end at 14.75%.

This is reflected in the average forecast for the June meeting, which dipped from 15.06% to 14.91%. Broadly, about one-third of analysts now believe the cycle will stop short of the 15% mark. A separate survey by Valor indicates that just under half of respondents expect the Selic to remain below 15%.

A second Central Bank report—tracking the distribution of inflation expectations—also points to fading expectations of a more aggressive rate hike cycle. The share of analysts forecasting rates above 15% in 2025 dropped from 36.7% in March to 16.4% in April.

The second factor weighing on year-end Selic forecasts is a growing belief that rate cuts might begin before the end of the year.

According to the median projection, the Selic would hold steady at 15% through the COPOM meetings in July, September, and November—then fall by 0.25 percentage point in December. This was the main new element in this week’s Focus report.

Market expectations for the year-end Selic are significant because they feed into the Central Bank’s inflation forecasting models. Although the updated forecasts show lower rates than those used in the last Copom meeting, the difference is not dramatic.

Previously, economists expected the Central Bank to begin easing in January 2026, starting with a 0.25 percentage point cut, followed by another of the same size. The Focus survey now anticipates one 0.25-point cut in December, but leaves the pace of easing for 2026 unchanged—still notably cautious.

The Focus distribution map supports this trend. The share of analysts projecting year-end Selic rates of 14.25% or lower rose from 5.7% in February to 9.4% in March and 14.3% in April.

This downward shift in rate expectations doesn’t materially change the outlook for real interest rates, which are expected to remain tight.

The average Selic rate across the eight COPOM meetings in 2026 is projected at 13.31%, compared to an expected inflation rate of 4.51%. For December 2026, the Selic is forecast at 12%, versus an inflation estimate of 4% for 2027.

If inflation expectations remain stable, this implies a real interest rate between 8% and 9% through the end of 2026—a restrictive level consistent with efforts to bring inflation back to target. The neutral real rate is estimated between 5% and 7%, depending on analysts’ outlook.

Since the March meeting, COPOM has emphasized that maintaining a sufficiently tight rate for long enough is just as important as reaching that restrictive level in the first place.

To enforce this stance, the Central Bank will need to counteract the market’s natural tendency to price in early rate cuts.

The Focus survey is starting to reflect that tension, subtly adjusting expectations. While this week’s dip in Selic projections may not shift the broader monetary picture, it could mark the beginning of a trend that—if it gains momentum—may complicate the Central Bank’s efforts to hold the line on inflation.

*By Alex Ribeiro, Valor — São Paulo

Source: Valor Inernational

https://valorinternational.globo.com/

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Trade war also creates opportunities for Brazil

Economists argue that while U.S. protectionism adds volatility to global trade, it also opens doors for some emerging markets

 

 

05/06/2025

The protectionist measures adopted by U.S. President Donald Trump are injecting instability into global trade, but they may also create new business opportunities for Brazil and other emerging markets. That’s the assessment of Maria Silvia Bastos Marques, former president of Brazilian Development Bank (BNDES) and currently Secretary for Major Projects in the state of Rio de Janeiro, and José Márcio Camargo, chief economist at Genial Investimentos.

The two experts spoke on Monday (5) at a business forum hosted by the Rio de Janeiro Commercial Association (ACRJ), where they discussed the shifting global economic landscape under Mr. Trump’s second term in office. Since taking office in January, the U.S. president has imposed tariffs on numerous countries—including key allies such as Canada and Mexico—initiated a trade war with China, and undermined multilateral cooperation.

According to Ms. Marques, one certainty amid the current uncertainty is that “we’re heading into a period of major turbulence and a world quite different from the one we’ve become used to.”

“It feels like we’re living through a reversal of what happened after World War II,” she said. In the postwar era, the U.S. was one of the main proponents of strengthening multilateral ties—an approach now being openly challenged by Mr. Trump.

Ms. Marques views the Trump administration’s trade stance as part of a broader power struggle with China: “There’s a contest between the U.S. and China for global supremacy—over who leads in innovation, who calls the shots, and who holds the greatest military power.”

However, she believes the U.S. is coming out on the losing end: “The way this policy is being implemented—chaotically and without coordination—has major consequences not only for the U.S. but for the world,” she said. “The expectation is that the U.S. will face higher inflation and slower economic activity as a result of these trade barriers.”

Ms. Marques also noted that “the U.S. is facing a supply shock, while China is dealing with a demand shock. It’s always easier to stimulate demand than to increase supply.”

In her view, the current scenario presents opportunities for Brazil and other emerging markets—particularly if they deepen their international ties and seek out new trading partners. One such possibility, she suggested, is that the volatility caused by the trade war could accelerate negotiations on a long-pending trade agreement between Mercosur and the European Union.

She also pointed to the potential benefits of a weaker U.S. dollar. “A depreciation of the dollar could help ease inflation in Brazil and create room for interest rate cuts—assuming there are no new credit or fiscal stimulus measures to boost demand,” she said. “Important opportunities could arise for Brazil, but only if we do our homework.”

Mr. Camargo, meanwhile, warned that the U.S.’s reindustrialization efforts could end up isolating its economy. “The American economy is likely to slow under the weight of these tariffs,” he said. “It’s really very difficult to reindustrialize an economy by using tariff controls.”

*By Camila Zarur  — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/

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