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Brazil’s IPCA-15 mid-month inflation measurement posted a 0.21 percent increase in April, following the 0.36 percent uptick in March. As in the previous month, the index came below market expectations (0.29 percent, according to LSEG) thanks to a drop in transportation prices (-0.49 percent), especially airfares (-12.20 percent, with a bearing of 0.09 p.p. on the overall index). 

In 12 months, the IPCA-15 slowed to 3.77 percent, below the 4.14 percent posted in March.

The less intense hike in food and fuel prices in April than in previous months significantly contributed to the overall slowdown in the IPCA-15. While the prices of food consumed in restaurants and other establishments dropped by 0.25 percent, the food consumed at home decelerated from 1.04 percent to 0.74 percent. 

As we reported earlier this month, however, the outlook for food in the coming months is still unclear. At the time, André Braz, an economist and inflation researcher at the Brazilian Institute of Economics at the think tank Fundação Getulio Vargas (FGV-Ibre), said that the data collection for FGV’s IPC index had shown an increase in food at home in April, which was not on the radar before. 

“If this is confirmed and the April data comes higher but is not compensated in the following months, it will lead me to change my projections for the year’s inflation from 3.9 percent to something around 4.15 percent,” he said.

Regarding health expenses, in addition to continuing to incorporate monthly fractions of health plan premium increases, this group of prices was also influenced by the rise in prices of pharmaceutical products (1.36 percent), especially medicines. 

Between March and April, the Medicines Market Regulation Chamber (CMED) of the Health Ministry analyzes the sector and authorizes the maximum adjustment rate for a set of medicines. This year, the authorized increase ceiling was 4.50 percent, which should also influence the IPCA inflation rate for the entire month.

Despite the apparent continuity of the disinflationary process, the Central Bank’s Monetary Policy Committee (Copom) has already signaled that it will not necessarily maintain its pace of recent interest rate cuts at its next meeting, scheduled for May 8. 

Among the factors influencing this new guideline are the high policy rate in the U.S. — which is likely to be maintained for longer than expected — and the country’s more-robust-than-expected economic activity, especially when it comes to the pace of job creation and real income dynamics, as they could notably impact inflation in services and more labor-intensive sectors, slowing inflation convergence down the road. 

Shareholders of Brazil’s oil giant Petrobras approved in a Thursday general meeting the payment of around BRL 22 billion (USD 4.2 billion) in extraordinary dividends relating to Q4 2023, reversing a previous board decision and ending a long public dispute that seemed to threaten the job of chief executive Jean Paul Prates.

Early in March, Mr. Prates said on social media that the Petrobras board was “guided” by President Luiz Inácio Lula da Silva in choosing not to pay the so-called extraordinary dividends for Q4 2023. He argued, however, that this did not constitute political interference in the company, but that it was a legitimate act by board members.

Mr. Prates publicly opposed the retention of the extraordinary dividends, and abstained from a vote in which government-appointed board members rejected a proposal to pay the extraordinary dividends that minority shareholders were expecting. The disagreement between Mr. Prates and members of the Lula administration, such as Mines and Energy Minister Alexandre Silveira, led to a dispute over his job and speculation in the press that he could be fired.

On the day after the decision to withhold the extraordinary dividends, Petrobras shares plunged around 10 percent. In late March, Goldman Sachs told clients to bet against the performance of Brazilian state-controlled companies’ stocks. Instead, the bank told them to invest in private rivals of these companies, citing fears of political interference by the Lula administration.

Marcelo Gasparino, the representative of minority shareholders in the board, said in an interview earlier this month that there is a “political dispute” between groups inside the government about the fate of Petrobras investment — a perception that has spread across financial markets.

As the owner of about 28 percent of Petrobras’s stock, the federal government would make around BRL 6 billion (USD 1.1 billion) from the distribution of extraordinary dividends announced today, a much-needed, if insufficient, relief to its challenging fiscal situation.

In total, Petrobras announced today a distribution of BRL 94.3 billion (USD 18.2 billion) in profits, including both ordinary and extraordinary dividends.

After a six-year gap, the Brazilian Institute of Geography and Statistics (IBGE) released updated official data about food insecurity in Brazilian households. 

Some 27.6 percent (or 21.6 million) of Brazilian households experienced food insecurity last year. Of these, 4.1 percent (3.2 million households with 8.7 million people) were in a severe situation, defined by dietary restrictions not only among adults, but children. 

According to IBGE, people in this situation do not necessarily suffer from hunger but may have experienced moments of lack of access to food throughout the data collection period (90 days before the questionnaire).

Today’s data shows a 15.7 percent drop in food insecurity compared to 2017-2018 levels, the years that followed the 2014-2016 financial crisis, the worst recession in Brazilian history. At the time, 10.3 million people experienced severe food deprivation. The number of people with light or moderate levels of food insecurity also declined. 

“The country has invested in social programs in recent years, and food insecurity responds well to this type of intervention. Furthermore, there has been a recovery in income and employment,” says IBGE analyst André Martins. 

At the light level of food insecurity, families live with some concern about access to food in the future, in addition to already having the quality of their diet compromised in some way. In contrast, at a moderate level, access restrictions are already a reality for adults.

Compared to a previous study from 2013, however, the problem is worse. Back then, the number of people experiencing severe food insecurity was 20 percent lower.

The data was extracted from the PNAD continuous household survey using criteria from the Brazilian Food Insecurity Scale (EBIA), which allows the identification and classification of households according to the level of food security of their occupants. 

Another four previous IBGE studies had addressed the topic of food security according to this scale: the Supplements on Food and Nutritional Security (SAN) — which were part of the PNAD survey in 2004, 2009, and 2013 — and the Family Budget Survey (POF), from 2017-2018.

In recent years, including the Covid pandemic period, other organizations have surveyed the hunger situation in the country based on different methodologies. The most prominent one, and which also became one of the last presidential election’s central talking points, was carried out by the Brazilian Research Network on Sovereignty and Food and Nutritional Security (Rede Penssan). 

According to this study, 33.1 million Brazilians experienced hunger in 2022. Based on the IBGE’s latest census, the UN also released estimated numbers for the country last year, pointing to 70.3 million people in some situation of food insecurity; of these, 21.1 million were hungry or “did not have access to food every day.”

Brazil’s House on Wednesday approved a bill that criminalizes ticket scalping for concerts, plays, and other events. Nicknamed the “Taylor Swift act,” the bill now goes to the Senate.

Three lawmakers separately introduced similar drafts on the issue of ticket scalping back in June 2023, after touts left thousands of Taylor Swift fans out of pocket and unable to attend her concerts in São Paulo and Rio de Janeiro. After waiting in line for days, hundreds of Swifties reported violent encounters with scalpers, and tickets sold out within 40 minutes. 

Scalpers then offered tickets to the concerts at roughly BRL 12,000 (USD 2,322) — 12 times face value and nine times Brazil’s minimum wage in 2023.

In December, consumer protection watchdog Procon-SP fined Time For Fun, the company responsible for organizing Taylor Swift’s most recent concerts in Brazil. 

Ticket scalping is already a crime for sporting matches, but the legislation aims to extend the definition to other events. The new bill defines scalping as selling a ticket for a higher price than face value, punishable by up to two years in jail plus a fine of 50 times the ticket value.

For those who divert tickets to supply scalpers, sentences can reach three years and fines could be 100 times the value of the tickets. Penalties will be aggravated by one-third if the crime is committed by public servants or event organizers.

The bill’s final draft, as approved by the House floor, adds that ticket scalping will not be punished unless it is practiced “regularly,” an ambiguous distinction that could lead to inconsistent rule enforcement — especially as the bill does not say how judges will tell regular and occasional scalpers apart.

The House Constitution and Justice Committee on Wednesday approved by a 34-30 majority a bill allowing states to enact legislation on firearms, an effort by the pro-Jair Bolsonaro opposition to reverse gun ownership restrictions enacted by the Luiz Inácio Lula da Silva administration after it took office last year. The bill will proceed to a floor vote before it reaches the Senate.

The bill is heavily supported by the right wing, namely the “bullet caucus” — composed mostly of retired police and military officers.

The bill was penned by far-right Congresswoman Caroline de Toni, who chairs the Constitution and Justice Committee. She wrote that efforts to avoid the “regulatory setback” imposed by the Lula administration “are welcome,” given that “the federal government has been imposing strong limitations on [the] segment of firearms.”

On his first day in office, Lula signed decrees rolling back former President Bolsonaro’s permissive gun control agenda and followed suit with new regulations. In July 2023, Lula signed a decree that reduced the number of guns and ammunition citizens could own, reinstated restrictions on 9-millimeter firearms and other calibers, and banned the so-called collectors, hunters, and sports shooters (known by the acronym CAC) from carrying loaded weapons on their commute to shooting locations.

Congressman Patrus Ananias, a member of the Workers’ Party who opposes the bill and postponed a vote last week, told The Brazilian Report that he believes the bill clashes with constitutional provisions reserving to the federal government the power to “authorize and inspect the production and trade of weapons.” Conservatives argue that the bill is solely about gun permits and does not touch on trade or production.

The opposition “wants to return to the 19th century,” Mr. Ananias said, adding that looser gun regulations will encourage violence. He expects the issue to be litigated before the Supreme Court — which has increasingly been called upon to arbitrate on issues decided (or neglected) by Congress, such as parliamentary immunity, same-sex marriage, social media regulations, indigenous land rights, and, in the case at hand, gun rights.

The Supreme Court’s large role in political issues has created friction between the different branches of government, with both chambers rushing to pass legislation that frontally challenges justices’ interpretation on many issues.

Earlier this month, the Lula administration won two gun-control cases heard before the Supreme Court. The justices struck down a law in the southern state of Paraná that made it easier for CACs to get carry permits, as well as another law in the southeastern state of Espírito Santo that allowed off-duty permits for security professionals.

In unanimous decisions, the justices ruled that only the federal government can issue regulations on firearms.

Dario Durigan, Brazil’s deputy finance minister, admitted that the government will face challenges that can hinder its effort to meet the zero-deficit primary target for 2024 if Congress approves new expenses.

Mr. Durigan said in an interview published on Wednesday that the government is trying to ensure that the budget approved in 2023 “has the exact balance between revenues and expenses.” However, “other issues” currently being discussed in Congress might mean that “we cannot carry out the plan” as initially approved by lawmakers.

These include a potential cut in payroll taxes for municipalities, a package of tax breaks for sectors associated with hotels, events, bars, restaurants, and theaters, which passed the House on Tuesday, and a bill currently discussed on the Senate floor to raise the salaries of judges and prosecutors. The tax break bill for the events sector, nicknamed ‘Perse,’ was limited to a total of BRL 15 billion (USD 2.9 billion) until late 2026.

Last week, the government announced details of its bill on the 2025 Budgetary Directives Law (LDO). The bill downgraded the projected fiscal surplus in 2025 to a zero-deficit goal from a surplus of 0.5 percent of the GDP previously projected in the budgetary law enacted for this year.

The bill was yet another change in fiscal goalposts by the Luiz Inácio Lula da Silva administration. Since the approval of the fiscal framework in August 2023, the government has been taking steps to gain more leeway to spend.

Back in January, the Federal Accounts Court, a public spending watchdog, issued a report estimating that Brazil could post a primary deficit of BRL 55 billion (USD 10.6 billion) this year, rather than meeting its zero-deficit target. This was before discussions on issues such as tax breaks for the events sector and improved pay for judges gained steam.

Mr. Durigan added that the government will need around BRL 50 billion (USD 9.6 billion) next year to reach the zero-deficit goal and that it will seek to approve measures with that objective this year.

Eve Air Mobility, a startup spun off Embraer’s innovation arm Embraer-X years ago, hopes to have the first full-size prototype of its aircraft ready by the end of this year and flying by the end of 2026. 

Daniel Moczydlower, Embraer-X’s president, said at Web Summit Rio that Eve’s electric vertical takeoff and landing (eVTOL) vehicle is being built in the city of Taubaté, in the state of São Paulo. The first flight tests should also take place later this year in the city of Gavião Peixoto, 330 kilometers from the capital of São Paulo, he told the press.

The company expects to have everything it needs (data on ground and flight tests, as well as wind tunnel data) to get the first green light from regulators by the end of 2024. Embraer’s Taubaté plant was announced in mid-2023, months after selecting the suppliers for the project.

With Embraer having decades of success producing new aircraft and working with Brazil’s civil aviation regulator Anac, Eve believes it could be the first to get such certification. The idea is to engage with Anac first, while also signing a bilateral agreement with the U.S. Federal Aviation Agency and obtaining a follow-on certification from regulators in the European Union.

This step is crucial, as it is not enough to create a prototype that can fly; a company’s model must meet several industrial requirements and be replicable and marketable. This is what can make Eve “win” the race with other air mobility startups worldwide.

So far, Eve has letters of intent for nearly 3,000 eVTOLs, and the aircraft is expected to enter into service in 2026. The latest was signed last week with AirX, Japan’s largest public helicopter air charter service, for up to 50 eVTOLs. 

The startup forecasts revenue of USD 4.5 billion by 2030, when it also expects to see its first vehicles flying in autonomous mode. The projection is based on an expectation of capturing at least 15 percent of the total addressable urban air mobility market, which is expected to be worth around USD 31 billion by then.

Far-right Congresswoman Carla Zambelli quarterbacked the hacking of the Judicial branch’s computer systems conducted by notorious hacker Walter Delgatti, according to charges filed by Prosecutor General Paulo Gonet on Monday.

The case is sealed, but Supreme Court Justice Alexandre de Moraes unsealed the charges on Tuesday. Both the congresswoman and the hacker were charged with hacking and fraud — both of which are aggravated because they conspired together.

According to the petition, Mr. Delgatti, under Ms. Zambelli’s guidance, hacked computer devices used by the Judicial branch “at least in the period between August 2022 and January 2023 (…) with the aim of tampering with information.”

Mr. Delgatti, who was arrested in August 2023, admitted to the Federal Police his responsibility for issuing a fraudulent arrest warrant against Justice Moraes with the justice’s own signature. He also said that Ms. Zambelli instructed him to hack Justice Moraes’ phone and email should he fail to hack an electronic voting machine. 

For the last few years, Justice Moraes has been the main target of the Brazilian far right’s vitriol. Since 2022, he has held the rotating presidency of the Superior Electoral Court, Brazil’s top electoral body. Mr. Gonet wrote in the petition that Ms. Zambelli “dedicated herself, at the time, to discredit the electronic electoral system,” and hence, discrediting a computer system used by the Judicial branch “would serve this purpose.”

Mr. Delgatti told lawmakers during the select committee on the January 8 riots that he was given a mission by then-President Jair Bolsonaro himself to discredit the electoral system. 

Last year, Mr. Delgatti was convicted to 20 years in prison in an unrelated case for hacking the phones and messaging apps of 126 people, several of them Brazilian officials related to the massive Car Wash anti-corruption taskforce. However, Mr. Delgatti’s credentials as one of the hackers responsible for this case attracted the attention of the far right.

The investigation into Mr. Delgatti’s relationship with Congresswoman Zambelli was initiated following a groundbreaking report by The Brazilian Report.

In early 2023, we uncovered that Mr. Delgatti was working for Ms. Zambelli. After initially denying any relationship with him, Ms. Zambelli admitted to it the following month. Subsequently, the Federal Police raided Ms. Zambelli’s offices and home, leading to Mr. Delgatti’s arrest for disrespecting court-mandated restrictions on internet use.

Ms. Zambelli’s lawyers claimed in a statement that “there is no evidence” against her, and that Mr. Delgatti is a “mythomaniac.” However, back in July 2022, she published a photo with him, both smiling. Weeks later, Mr. Delgatti was photographed entering the presidential residence — where he says he met with former President Jair Bolsonaro, to whom Ms. Zambelli is close.