When Businesses Sink: Comparing Brazil’s Last Two Administrations
By Hotspotnews
Brazil’s private sector does not thrive in a vacuum. It responds to interest rates, fiscal predictability, regulatory burden, and whether the state treats entrepreneurs as partners or cash cows. The contrast between Jair Bolsonaro’s term (2019–2022) and Luiz Inácio Lula da Silva’s third term (2023–present) is visible in the companies that stayed afloat versus those that sought court protection or saw their market value evaporate.
Under Bolsonaro, judicial recovery filings trended downward after the initial pandemic shock. Serasa Experian data show 1,387 processes in 2019, falling to 1,179 in 2020, 891 in 2021, and 833 in 2022. The economy contracted sharply in 2020, then rebounded with 4.8 percent growth in 2021 and 3.0 percent in 2022. Formal employment recovered and the labor-market reforms inherited from the Temer years continued to operate. Tourism giant CVC, already damaged by an accounting restatement and then by COVID travel collapse, saw its shares plunge during this period—but the broader pattern was one of declining insolvency filings as activity resumed.
The picture changed after 2023. Judicial recoveries jumped to 1,405 filings in 2023 and hit a then-record 2,273 in 2024. In 2025, Serasa recorded 977 processes involving 2,466 companies—the highest annual volume since 2016 under the updated methodology. By mid-2026 the stock of companies in judicial recovery reached 6,341 in the core universe tracked by RGF-BIZDOC. High-profile cases piled up: Casas Bahia sought protection over billions in debt and closed hundreds of stores; Braskem moved to an out-of-court restructuring covering roughly US$10.9 billion; Oi finally entered bankruptcy after years of failed restructurings; Ambipar, Azul, Bombril and others joined the list. CVC’s shares, already down more than 90 percent from their 2018–2019 peak near R$60, continued trading near R$1.70 with a market capitalization below R$1 billion.
GDP still grew—3.2 percent in 2023 and 3.4 percent in 2024—helped by commodities and a tight labor market that later posted record employment of 103.3 million and unemployment of 5.3 percent. Yet that growth occurred alongside Selic rates that spent long stretches at or above 14–15 percent, a heavier tax and spending stance, and repeated fiscal uncertainty. Out-of-court restructurings in 2026 alone covered a record R$174.5 billion, dominated by Raízen and Braskem. Foreign direct investment remained sizable, but competitiveness rankings slipped and the Heritage Foundation’s 2026 Index scored Brazil 52.4 (“mostly unfree”), citing bureaucracy, fiscal weakness, and investment restrictions.
A conservative reading is straightforward: cheaper credit and clearer rules help businesses stay solvent. Prolonged high rates, rising public spending, and legal unpredictability do the opposite. Many of today’s distressed balance sheets were built in earlier cycles, yet the acceleration of court-supervised restructurings and the destruction of shareholder value in listed names such as CVC, Casas Bahia and others occurred after 2023. Job numbers look strong on the surface; the corporate wreckage underneath tells a different story about who can actually keep the lights on.
#Brasil #Economia #Empresas #RecuperacaoJudicial #Lula #Bolsonaro #CVC #CasasBahia #Selic #Empreendedorismo
Sources: Serasa Experian judicial recovery and bankruptcy series; RGF-BIZDOC Monitor; Gazeta do Povo company-value reports; Valor Econômico and Valor International coverage of restructurings and FDI; IBGE labor and GDP data; Heritage Foundation 2026 Index of Economic Freedom; Central Bank of Brazil external accounts.