Brazilian Federal State Enterprises Face Growing Fiscal Risk, IFI Warns

The Independent Fiscal Institution (IFI), linked to Brazil’s Senate, released a report highlighting a sharp deterioration in the financial health of several federal state‑owned companies. Core indicators such as net equity, operating cash flow and profit margins are negative for key firms including Codevasf, the national postal service (Correios), the naval project manager Emgepron and airport operator Infraero.

The analysis separates dependent enterprises, which rely on Treasury subventions, from non‑dependent ones that mainly affect dividend payments to the Union. Dependent firms risk requiring supplemental budget allocations or capital injections, pressuring public finances already constrained by the Sustainable Fiscal Regime. In 2025, the combined personnel and operating expenses of the dependent group reached roughly R$ 30 billion, with R$ 27.5 billion devoted to payroll.

Since 2018, 17 dependent companies have shown worsening cash‑flow sufficiency, and four – Codevasf, Infra, EBC and Amazul – recorded operational cash deficits in 2025. The IFI warns that continued deterioration could increase the Treasury’s fiscal burden and limit resources for other policy priorities.