Brazil’s Congressional Earmarks Quadruple in a Decade as State Firms Sink
BRAZIL · ECONOMY
Key Facts
—What happened: Brazil’s congressional earmarks reached R$47.1 billion (US$9.1 billion) in 2025, up 315% in eleven years.
—Who counted: The figures come from a study series by Ipea, the federal government’s own economic research institute.
—The real story: Nearly half the Health Ministry’s discretionary money now arrives via earmarks, so lawmakers decide spending that ministries once planned.
—The catch: Most earmark money now funds running costs, not investments, and nothing guarantees the same funds return next year.
—The other drain: Federal state-owned companies are running a deficit of R$8.3 billion (US$1.6 billion) in 2026 so far.
—The symbol: Correios, the postal service, is heading for the worst annual result in its history, its own minister concedes.
A study by Brazil’s own research institute shows congressional earmarks more than quadrupling in a decade, while state-owned companies post record deficits and the postal service heads for the worst year in its history.
What the Ipea study found
Brazil’s congressional earmarks are budget amendments that let each deputy and senator direct part of the federal budget. The money pays for things like ambulances, health clinics or street paving in their home districts.
The volume formally committed jumped from R$11.3 billion (US$2.2 billion) in 2014 to R$47.1 billion (US$9.1 billion) in 2025. Adjusted for inflation, that is growth of 315% in eleven years.
The study was produced by Ipea, the Institute of Applied Economic Research, at the request of Deputy Eduardo Bandeira de Mello. Estadão published its findings on Monday.
The turning point was 2015. A constitutional amendment made individual earmarks mandatory, so the executive must now pay what each lawmaker designates.
Ipea’s researchers call the result “budgetary parliamentarism”. In plain English: Congress, not the government, increasingly decides where federal money goes.
Where the money goes now
Social policies absorbed R$35 billion (US$6.8 billion) of the 2025 total, up 282% in real terms. That is about three quarters of all earmark spending, and the constitution reserves half of individual earmarks for health.
Health spending via earmarks rose from R$5.1 billion (US$1 billion) in 2014 to R$24.8 billion (US$4.8 billion) in 2024. Earmarks now fund 45.4% of the Health Ministry’s discretionary budget, up from 18.6%.
Here is the catch the headline hides. In 2024, 91.7% of health earmark money paid for running costs like maintenance and supplies, not new investments.
Those costs repeat every year, but earmarks have no guarantee of continuity. A clinic funded this way can lose its money the following year, which makes planning nearly impossible.
The Supreme Court has spent two years forcing transparency onto the system. Justice Flávio Dino now requires work plans, dedicated bank accounts and public reporting for the loosest category, known as Pix amendments.
The state companies bleeding at the other end
While Congress directs more money, the companies the state owns are losing more of it. Federal state-owned enterprises are running a deficit of R$8.3 billion (US$1.6 billion) in 2026, according to central bank data reported in the Brazilian press.
That figure excludes Petrobras and the public banks, which finance themselves in markets. It measures the weaker companies that may one day need taxpayer money, which is why economists watch it.
The deficit surpassed the whole of 2025 by May and is the worst in the central bank’s series since 2002. High interest rates and financial expenses explain part of it; management problems explain the rest.
Correios, the symbol of the problem
The postal service Correios is the single largest source of the red ink. Management Minister Esther Dweck has conceded the company will post the worst annual result in its history in 2026.
Correios lost R$3.2 billion (US$618 million) in the first quarter alone, after losing R$8.5 billion (US$1.6 billion) in 2025. A Treasury-guaranteed loan of R$12 billion (US$2.3 billion) keeps the operation running.
The government blames structural decline in mail and fierce private competition in parcels. Critics point to political appointments after the state companies law was loosened in 2023.
Both readings agree on the direction. The taxpayer guarantee means a failed restructuring lands in the budget, alongside the earmarks Congress is not giving up.
What to watch from here
The first test is the Supreme Court. Stricter transparency rules on Pix amendments could still shrink the least traceable part of the congressional earmarks machine.
The second is the Correios restructuring plan, which assumes the company returns to healthy indicators after 2026. The voluntary layoff programme has so far fallen short of targets.
The third is the election. Neither congressional earmarks nor state companies will be reformed before October, because both are how incumbents deliver visible benefits to voters.
Frequently Asked Questions
What are Brazil’s congressional earmarks?
They are budget amendments that let each deputy and senator direct part of the federal budget to chosen projects. Since a 2015 constitutional change, payment of individual earmarks is mandatory for the government.
How much do the earmarks total?
Committed earmarks reached R$47.1 billion (US$9.1 billion) in 2025, up from R$11.3 billion (US$2.2 billion) in 2014. That is real growth of 315% in eleven years, per the Ipea study.
Why do critics say earmarks hurt planning?
Most earmark money now pays running costs that repeat every year, but nothing guarantees the funds return. Health earmarks alone fund 45.4% of the ministry’s discretionary budget, tying its hands.
How big is the state companies’ deficit?
Federal state-owned enterprises are running a deficit of R$8.3 billion (US$1.6 billion) in 2026 so far, per central bank data. The figure excludes Petrobras and the public banks.
What is happening at Correios?
The postal service is heading for the worst annual result in its history, its own minister says. It lost R$3.2 billion (US$618 million) in the first quarter and survives on a Treasury-guaranteed loan of R$12 billion (US$2.3 billion).
Connected Coverage
We covered the postal crisis in Correios Asks 7,000 Staff to Leave as Losses Mount and the rescue debate in Brazil’s postal giant bets on closures, layoffs and a lifeline. More fiscal coverage on our Brazil hub.
Sources: Ipea study series commissioned by Deputy Eduardo Bandeira de Mello, reported by Estadão on 31 August 2026; Banco Central fiscal statistics; Management Minister Esther Dweck’s interview with O Globo.
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