The federal state-owned enterprise deficit totals R$6.4 billion in the year to October and is near a record level Brazil

BC’s statistics do not take into account Petrobras and the financial sector, such as public banks. The central bank’s methodology is known as “below the line” which takes into account variation in debt. National Treasury accounts use an “above the line” methodology, which takes into account revenues and expenditures.

The situation at the post office has drawn attention due to the crisis this year. Last week, the government announced emergency allocations worth R$3.3 billion in the budget, most of the amount due to a deterioration in the primary result of federal state-owned enterprises, partly due to the situation in Correios. The company seeks to facilitate a bank loan worth at least 10 billion Brazilian reais this year.

BC Statistics Chief Fernando Rocha noted that some reasons may explain the SOE results. For example, a company’s cash flow may have decreased because the state-owned company decided to make investments and these expenses cause a primary deficit.

He said, “Suppose a state-owned company decides to buy machinery and equipment, create a new company, or do something to expand production capacity. This new investment is not a financial asset, or buying a machine, or constructing a new building to install it, or anything else. It does not constitute a financial asset, so it is not included in net debt. The company has replaced the financial asset, which is its cash availability, with a non-financial asset. This represents a deficit in financial statistics.”

In addition, the company may have increased its expenses. “When they incur an increase in expenses, for example, staff expenses or any other type of expense, against a certain amount of revenue, they will have a lower outcome, which will also reduce their cash availability and increase their debt,” he said.

State-owned enterprises have recorded a deficit since 2023 in British Columbia statistics. He said, “This sequence of deficits (2023, 2024, and 2025) shows that the trend of net debt is actually increasing. If these results are due to investments, and if the investments prove profitable and the company achieves better results in the future, then we can envision a balance over time. But what we have seen in the last three years for example, which is the data shown in the table (financial statistics), is an increase in net debt and a larger stock of debt, and everything else constant will generate a higher interest bill.” Rocha.

Looking at federal, state and municipal companies, the deficit reached R$7.4 billion this year through October. The result is lower than the negative result of R$ 7.8 billion in the same period of 2024.

In 2025 through October, the deficit of state-owned enterprises reached R$694 million compared to R$3.4 billion in the first 10 months of 2024. Municipal corporations recorded a deficit of R$399 million versus a surplus of R$42 million in the same period last year.