Key Points

  1. Brazil's financial vulnerability worsened in 22 states in the second quarter of 2026, with a 1.01% increase in the average.
  2. Mato Grosso led the improvement, while the Distrito Federal suffered the worst decline.
  3. The Financial Vulnerability Index shows that states can have high vulnerability levels but be on a path of improvement, or vice versa.

What's Behind Brazil's Financial Vulnerability Worsening

Brazil's financial vulnerability worsened in 22 states in the second quarter of 2026, with a 1.01% increase in the average, according to the Ibre's Financial Vulnerability Index. The index considers six dimensions: inadimplência, endividamento relativo, pressão de curto prazo, custo do crédito, capacidade de absorção de choques, and fragilidade do mercado de trabalho.

The analysis shows that states can have high vulnerability levels but be on a path of improvement, or vice versa. The Financial Vulnerability Index is a tool for policymakers to understand financial vulnerability in Brazil's states.

At a Glance

Main CompanyFGV Ibre
Research center that developed the Financial Vulnerability Index
Main ExecutiveFlávio Ataliba
Economist and researcher at FGV Ibre
OrganizationFGV Ibre
Research center that developed the Financial Vulnerability Index
RegulatorBanco Central do Brasil
Central bank of Brazil that provided data for the index
LocationBrazil
Country where the financial vulnerability index was applied
IndustryFinance
Industry affected by the financial vulnerability index
Key Product/ServiceFinancial Vulnerability Index
Index developed by FGV Ibre to measure financial vulnerability in Brazil's states

The Drivers of Financial Vulnerability in Brazil's States

Drivers of Financial Vulnerability in Brazil's States

The Financial Vulnerability Index shows that inadimplência is the main driver of financial vulnerability in Brazil's states, explaining 77% of the increase in the average. The pressão de curto prazo is the second main driver, representing 32% of the increase.

However, the behavior of the index varies between states. Mato Grosso led the improvement, while the Distrito Federal suffered the worst decline.

What Brazil's States Can Do to Improve Financial Resilience

What Brazil's States Can Do to Improve Financial Resilience

States with strong agricultural activity tend to have higher inadimplência rates. To improve financial resilience, states should focus on managing risk and renegotiating rural credit. In the Northeast, the agenda should focus on education finance, substituting expensive debt with cheaper lines, and protecting the income of informal workers.

Risk & Opportunity Assessment

Commercial RiskLowThe Financial Vulnerability Index is a tool for policymakers to understand financial vulnerability in Brazil's states, but it does not directly affect commercial risk.
Competitive RiskLowThe Financial Vulnerability Index does not directly affect competitive risk.
Regulatory RiskMediumThe Financial Vulnerability Index may lead to regulatory changes to address financial vulnerability in Brazil's states.
Reputation RiskLowThe Financial Vulnerability Index is a tool for policymakers to understand financial vulnerability in Brazil's states, but it does not directly affect reputation risk.
Technology DisruptionLowThe Financial Vulnerability Index does not directly affect technology disruption.
Commercial OpportunityMediumThe Financial Vulnerability Index may lead to new business opportunities in the finance sector to address financial vulnerability in Brazil's states.