Brazil's 2027 Budget to Inject $1.2 Billion Into Ailing Postal Service

The Brazilian government has confirmed that its 2027 budget proposal will include a capital injection of 6 billion reais (approximately $1.2 billion) into the state-run postal service, Correios. The move is part of a broader restructuring plan aimed at restoring the company's profitability.

According to an official statement signed by the ministers of Management, Planning, and Communications, the funding is designed to give Correios greater stability in its negotiations with clients and suppliers. The government noted that previous liquidity support has already helped the company improve its operations and strengthen its debt profile.

The budget bill is scheduled to be submitted to Congress on Monday. The announcement comes as Correios reported a second-quarter net loss of 2.4 billion reais on Saturday, a figure that represents a 5.5% narrowing from the same period last year.

President Luiz Inacio Lula da Silva, who is seeking re-election in October, has reiterated the government's intention to rehabilitate Correios rather than privatize it. The company has posted losses for several consecutive quarters.

As part of its recovery efforts, Correios approved a restructuring plan last year and has already completed 12 billion reais in federally guaranteed credit operations. The company also announced on Saturday that it is in advanced talks for a new credit operation worth roughly 7 billion reais, also backed by the federal government.

Correios attributes its financial difficulties to falling revenue from traditional postal services, rising operating costs, legacy legal liabilities, intensifying competition in logistics, and the expenses associated with maintaining a nationwide universal postal network.