Brazil's January 2026 Economic Indicators Show Improved External Accounts and Record Federal Revenue

In January 2026, Brazil demonstrated significant economic progress, marked by a reduction in the external accounts deficit and a record federal revenue collection. The Central Bank reported a negative balance in Brazil's external accounts of $8.36 billion for the month, an improvement from $9.809 billion in January 2025. This improvement was driven by a $2.1 billion increase in the trade surplus, primarily due to a 10% decrease in imports across all sectors, signaling a slowdown in economic activity. Exports declined slightly by 1.2% to $25.282 billion, resulting in a trade surplus of $3.516 billion. The services account deficit improved by 12.8%, falling to $3.972 billion, while the primary income deficit rose to $8.312 billion, reflecting increased foreign investments in Brazil. Foreign direct investments surged to $8.168 billion, up from $6.708 billion the previous year, highlighting strong investor confidence. Alongside this, net portfolio investments climbed to $8.867 billion in January, the highest since July 2018. Brazil’s international reserves also increased to $364.367 billion.

Complementing these external account improvements, federal revenue reached R$ 325.7 billion in January 2026 — the highest monthly figure since 1995. Adjusted for inflation, this represents a real growth of 3.56% compared to the previous year, driven by a pickup in economic activity and changes in tax legislation. Revenue from the Imposto sobre Operações Financeiras (IOF) rose 49.05% to R$ 8 billion, and Imposto de Renda Retido na Fonte (IRRF) on capital income increased by 32.56% to R$ 14.68 billion, influenced by fixed-income investments and profit distributions to shareholders. Social Security contributions also grew by 5.48%, totaling R$ 63.45 billion. Notably, taxation on online betting skyrocketed by 2,642% to R$ 1.5 billion, a result of regulatory changes. Conversely, import taxes declined 14.74%, consistent with reduced import volumes.

These robust figures support the Brazilian government’s fiscal target for 2026, aiming for a primary surplus of R$ 34.3 billion, with some flexibility under fiscal rules. Overall, Brazil’s economic data from January points to cautious optimism, reflecting improved external balances, strong foreign investment inflows, and a resilient tax base despite slower import activity.

Fernando Rocha, head of the Central Bank's Statistics Department, emphasized the "robust trend" in the current account reductions over the past months, underscoring Brazil's economic strength amid global uncertainties.