Fourteen consecutive quarters of losses since the end of 2022
In the long arc of Brazil's experiment with state capitalism, the first four months of 2026 have written a troubling new chapter: federal enterprises outside the oil, energy, and banking giants have bled R$5.9 billion in losses, surpassing an entire year's deficit in a single season and reaching depths unseen since records began in 2002. At the heart of this unraveling sits the Correios, a postal service that has lost more than R$8.5 billion in a single year and now depends on emergency Treasury loans to survive. The government's own projections offer little comfort, forecasting red ink through 2030 — a quiet admission that the machinery of public enterprise, as currently configured, may no longer be able to sustain itself.
- Brazil's federal state-owned enterprises burned through R$5.9 billion in just four months — more than the entirety of 2025's losses and the worst such stretch since modern records began.
- The Correios, once a mundane symbol of public service, has become the crisis's most visible wound, posting R$8.5 billion in losses in 2025 alone and stringing together fourteen consecutive quarters in the red.
- An emergency R$12 billion Treasury-backed loan and a sweeping expansion of the postal service's commercial mandate — now including insurance, investment products, and telecom — signal a government scrambling for solutions.
- Yet the government's own budget projections to Congress concede that state enterprises will keep losing money through 2030, suggesting these interventions are damage control, not a cure.
- The losses mark a stark reversal from the 2020–2022 surplus years, with the deficit pattern emerging precisely at the start of Lula's third term in 2023 and deepening with each passing quarter.
Brazil's federal state-owned enterprises posted R$5.9 billion in losses through April 2026, according to Central Bank data released on May 29th — the worst four-month performance since tracking began in 2002, and a figure that has already eclipsed the full-year deficit of R$5.8 billion recorded in 2025. The calculation covers institutions like the postal service, the federal airport operator, the mint, and various technology agencies, deliberately excluding giants like Petrobras and Eletrobras.
No institution better captures the depth of the crisis than the Correios. The national postal service lost R$8.5 billion in 2025 — more than triple its 2024 deficit — and has now recorded fourteen consecutive quarters of losses since late 2022. To keep it afloat, the government authorized a R$12 billion emergency loan backed by the National Treasury in December, and in May expanded the Correios' commercial mandate to include insurance products, investment certificates, and telecommunications services, a dramatic reinvention for an institution built around mail delivery.
These measures, however, appear to be stabilizers rather than solutions. The government's own budget guidelines submitted to Congress project that federal state enterprises will continue operating at a loss through 2030, with Correios expected to post significant deficits again in 2026 despite restructuring efforts.
The current deterioration stands in sharp contrast to the 2020–2022 period, when state enterprises collectively ran surpluses. The shift into persistent deficit began in 2023, the first year of President Lula's third term, and has deepened steadily since — with no clear mechanism yet identified to reverse the trend.
Brazil's state-owned enterprises have accumulated losses of R$5.9 billion in the first four months of 2026, according to data released by the Central Bank on Friday, May 29th. The figure marks the worst performance for any four-month stretch since the Central Bank began tracking these numbers in 2002, and it has already surpassed the entire deficit recorded throughout 2025, which totaled R$5.8 billion.
The calculation excludes some of the country's largest corporations—Petrobras, Eletrobras, and the public banking system—and instead captures the performance of enterprises like the postal service, the federal airport operator, the mint, and various data and technology agencies. The previous worst opening quarter on record came just last year, when state enterprises posted losses of R$2.7 billion through April 2025, a figure that now looks modest by comparison.
At the center of this deterioration sits the Correios, the national postal service, which has become a symbol of the broader financial crisis afflicting the state enterprise sector. In 2025 alone, Correios lost R$8.5 billion—more than triple the R$2.6 billion deficit it recorded in 2024. The company has now endured fourteen consecutive quarters of losses dating back to the end of 2022, a streak that shows no signs of breaking. The scale of the problem forced the government to authorize an emergency loan of R$12 billion in December, backed by the National Treasury, intended to cover debt obligations and shore up the company's cash position. In May, facing continued pressure, the government expanded the postal service's commercial authority, permitting it to sell insurance products, investment certificates, and telecommunications services—a dramatic shift for an institution historically defined by mail delivery.
Yet these interventions appear unlikely to reverse the trajectory. The government's budget guidelines for 2027, submitted to Congress, project that federal state enterprises will continue operating at a loss through 2030. For Correios specifically, the executive branch acknowledges that despite financial restructuring efforts, the company is expected to post substantial losses again in 2026.
The current crisis represents a sharp reversal from the recent past. Central Bank data shows that state enterprises collectively ran surpluses from 2020 through 2022, a period that included the previous administration. Beginning in 2023—the first year of Luiz Inácio Lula da Silva's third term as president—the sector shifted into persistent deficit. The R$5.9 billion loss through April 2026 extends a pattern of deterioration that has now become the defining characteristic of Brazil's state enterprise portfolio, with no clear mechanism in place to arrest the decline.
Notable Quotes
Despite financial restructuring measures, the company is expected to post substantial losses again in 2026— Brazilian government executive branch
The Hearth Conversation Another angle on the story
Why did the postal service alone lose eight and a half billion reais last year? That's an enormous figure for a company that delivers mail.
The Correios has been caught between two forces—declining mail volumes as digital communication replaces physical correspondence, and labor costs that haven't adjusted to that reality. The company kept its workforce and infrastructure largely intact while its core business contracted.
So the government just gave them twelve billion in a loan? That seems like treating the symptom, not the disease.
Exactly. The loan was a stopgap to keep the company solvent and paying its obligations. But the government's own projections admit Correios will still lose money in 2026 and beyond. They're hoping the new commercial services—insurance, telecom—will eventually diversify revenue, but that's a long-term bet.
And this is happening across all the state enterprises, not just the postal service?
Yes. The broader portfolio of federal enterprises lost nearly six billion in just four months. Some of that is Correios, but it's also airports, data agencies, the mint. It's a systemic problem, not isolated to one company.
The government says they'll be losing money through 2030. That's four more years of red ink they're already planning for.
That's the striking part—they're not projecting a turnaround. They're projecting managed decline, which suggests they don't have a solution yet, only a hope that things stabilize at a lower level of loss.