Brazil Faces Record Corporate Bankruptcies and Recovery Requests in 2026 Amid Economic Strain

Brazil is bracing for a record number of company bankruptcies and judicial recovery filings in 2026, highlighting deepening economic challenges. According to Gazeta do Povo, the projected crisis stems from persistently high interest rates, particularly the elevated Selic benchmark that inflates loan costs, alongside tightening credit availability as banks exercise greater caution in the electoral year. These financial constraints are compounded by the pressures of impending tax reforms, constraining businesses’ liquidity and ability to operate effectively.

The agribusiness sector, historically a strong component of Brazil’s economy, now leads in judicial recovery requests, struggling with crop failures, falling commodity prices, and high indebtedness. Meanwhile, micro and small enterprises are disproportionately affected, accounting for approximately 80% of recovery filings, as their limited cash flow makes it difficult to endure credit shortfalls. This domino effect extends to suppliers reliant on these vulnerable businesses.

Experts warn many companies delay seeking judicial recovery, often waiting until they lack sufficient assets or cash to rehabilitate, pushing them toward bankruptcy. Prompt action is urged for both businesses and creditors to navigate the crisis successfully. Efficient debt collection and timely restructuring efforts are crucial to prevent further insolvencies, underscoring the urgency amidst Brazil’s challenging economic forecast for 2026.