Brazil to Invest Oil Revenue in Energy Transition; EU and Mercosur to Ratify Trade Agreement
Key Takeaways
- Brazil will invest oil revenue in energy transition; Petrobras to fund renewable sources.
- EU and Mercosur to ratify trade agreement, creating a 700 million-person free trade zone.
- Brazil to block Bet da Caixa launch due to tax and public health concerns.
- IPCA-15 inflation slows to 0.18% in October 2025; 12-month rate at 4.94%.
- Petrobras signs R$8.3 billion contracts to resume refinery works, creating 30,000 jobs.
Top Stories
Brazil to invest oil revenue in energy transition.
In October 2025, President Luiz Inácio Lula da Silva announced that Brazil will use oil exploration revenue to invest in the energy transition. Petrobras will transition from an oil company to an energy company, using profits to fund renewable sources.
EU and Mercosur to ratify trade agreement.
In October 2025, Germany announced the agreement to ratify the Mercosur trade agreement with Brazil, Argentina, Uruguay, and Paraguay, creating a free trade zone with 700 million inhabitants. The agreement aims to increase EU exports by up to 39% and is planned to be signed by December 19, 2025.
Brazil to block Bet da Caixa, online betting platform.
In October 2025, the Brazilian government announced it would block the launch of Bet da Caixa, the Caixa Econômica Federal's online betting platform, due to concerns about tax justice and public health. President Lula and Minister Fernando Haddad aim to stop the initiative, which could generate R$2.5 billion in revenue by November 2025.
IPCA-15 inflation slows to 0.18% in October 2025.
The IPCA-15 inflation preview slowed to 0.18% in October 2025, below the 0.25% expectation, with the 12-month accumulated rate at 4.94%. Transport costs, driven by airfares and fuel, were the main drivers, while electricity prices decreased.
Petrobras signs contracts for R$8.3 billion refinery works.
In October 2025, Petrobras finalized nine contracts totaling over R$8.3 billion to resume works on Refinery Abreu e Lima (Rnest) in Ipojuca, Pernambuco. Completion is expected by 2029, generating 30,000 jobs and adding 13 million liters of Diesel S10 per day to national production.
Investment Flows
Cosan shareholders approve R$10 billion capital injection.
In October 2025, Cosan shareholders approved a capital injection of up to R$10 billion with BTG Pactual and Perfin, creating a new holding company. The operation aims to reduce gross debt, strengthen cash, and unlock projects in fuels, logistics, and bioenergy before December.
Job Market Update
IBGE opens 9,580 temporary jobs in Brazil.
The Brazilian Institute of Geography and Statistics (IBGE) announced 9,580 temporary job openings across 530 municipalities for positions like Research and Mapping Agent. Salaries range from R$2,676.24 to R$3,379.00, plus benefits, with the Getúlio Vargas Foundation (FGV) managing the application process.
Market Movers
Correios plans restructuring, including agency reduction.
In 2025, Correios plans a restructuring that includes reducing agencies, changing the employee health plan, and creating a real estate fund to increase revenue. The plan aims to ensure financial viability and obtain a R$20 billion loan.
Ultrapar enters GNL market.
In October 2025, Ultrapar announced the purchase of 37.5% of Virtu GNL for R$102.5 million, marking its entry into the liquefied natural gas (LNG) market. The acquisition aims to expand Ultrapar's presence in high-growth businesses and focus on lower-carbon logistics.
Policy Briefing
TCU: New tax benefits are illegal with government deficit.
In October 2025, TCU President Vital do Rêgo stated that new tax benefits are illegal while the government has a deficit, referencing the law prohibiting tax waivers without a primary surplus. He criticized projects like the National Policy for Critical Minerals, warning of fiscal imbalance.
Bill on adulterated beverages includes fiscal measures.
In October 2025, a bill on adulterated beverages included fiscal measures to offset a projected R$30 billion fiscal impact for 2026. The bill expands the definition of heinous crimes, increases penalties, and proposes a national tracking system for alcoholic beverages.
Haddad: Prefers to be seen as a spender than a defaulter.
In October 2025, Finance Minister Fernando Haddad stated he prefers to be seen as a spender rather than a defaulter, criticizing the postponement of precatory payments. He defended the payment of judicial debts, highlighting the importance of the country's reputation and respect for judicial decisions.
Temporary bridge on BR-101 collapses.
In October 2025, the temporary detour bridge on BR-101 in Itapebi, Bahia, collapsed due to heavy rains, causing traffic congestion. Federal Deputy Neto Carletto requested explanations from the federal government regarding the lack of maintenance and the timeline for a new bridge.
Administrative Reform PEC presented to the Chamber.
In October 2025, PEC 38/2025, the Administrative Reform, was officially presented to the Chamber of Deputies, aiming to reform the Brazilian public administration. The proposal focuses on governance, professionalization, digital transformation, and the elimination of privileges, with 70 measures across four main areas.
Poor condition of rural roads impacts economy.
In October 2025, CNA released a diagnosis indicating that rural roads in the Central-West region are in poor condition, impacting the economy and the environment. The study revealed that nearly 340,000 km of roads require annual investments for recovery and maintenance.
Investigation into luxury SUV rentals by the Senate.
In October 2025, the Public Prosecutor's Office at the TCU requested an investigation into the legality of the Senate's luxury SUV rental contracts. The sub-procurator-general questioned the high monthly cost and the inclusion of unnecessary items, arguing that spending should prioritize public interest.
Political Climate
Lula's government approval reaches 48% in October 2025.
An AtlasIntel survey in October 2025 showed President Lula's government with a 48% positive rating, surpassing the 47.2% negative rating, the best result since November. The recovery is attributed to Lula's stance against US tariffs, proposed income tax exemptions, and lower food prices.
Physical retail still preferred by 64.3% of Brazilians.
A study by Neogrid and Opinion Box in October 2025 indicates that 64.3% of Brazilians still prefer physical retail for food purchases, with convenience and experience being key factors. The study also reveals an increase in weekly purchases and the importance of strip malls.
Aging population to impact economy and stock market.
In October 2025, a Santander report warned that the accelerated aging of the population in Latin America, including Brazil, will impact the economy and the stock market. The region is aging faster than developed countries, affecting pension and health systems.
Brazilian agriculture faces climate change challenges.
In 2025, Brazilian agriculture faces challenges due to climate change, including severe droughts and excessive rainfall, impacting soil degradation and crop relocation. Producers emphasize the importance of soil management and the need for adaptation of seeds and innovative agricultural practices.
Trade Winds
Brazil resumes poultry exports to EU.
In October 2025, the EU resumed accepting the pre-listing system for Brazilian poultry exports, including chicken, turkey, and duck. This move, announced by the Minister of Agriculture, Carlos Fávaro, recognizes the Brazilian inspection system and should expand the number of plants authorized to export to the EU.
Brazil resumes chicken exports to Malaysia.
In October 2025, Brazil resumed chicken exports to Malaysia after a suspension due to avian flu. The announcement was made during the Brazilian presidential mission, and Malaysia also authorized the import of other Brazilian products.
Brazil in talks for international carbon market.
Finance Minister Fernando Haddad announced that Brazil is in advanced negotiations with the European Union and China to create an international carbon market. The goal is to announce a coalition at COP30 in Belém, Pará, in November, involving the exchange of pollution credits.