Brazil & Southern Cone - July 2026

PARAGUAY | Itaipú transfers funds to Paraguay under Annex C. Itaipú Binacional, the company that operates the binational Itaipú hydroelectric dam, announced on 6 July that it has paid Paraguay US$239m in the first half of the year. The payment was made via Annex C of the Itaipú Treaty, which dictates how Brazil and Paraguay sell surplus electricity generated by the dam to each other. The amount was paid in the form of royalties, energy transfers, and payments to Paraguay’s state energy company (Ande). “These disbursements, provided for in Annex C of the Treaty, are essential for provincial governments, municipalities, and the state-owned enterprise to carry out their respective projects for the benefit of the population,” said Itaipú Binacional in a statement. With regard solely to payments made in June, royalties totalled US$22m, and compensation for power transfers reached US$10m, while Ande received US$1.7m in compensation. Annex C has been a sticking point in negotiations over the binational dam, with Paraguay pushing for better terms under which to sell the surplus electricity generated by the dam in the country to Brazil, which has significantly higher electricity needs.

BRAZIL | Vehicle sales rise in first half of 2026. The national federation of automobile dealers (Fenabrave) released sales figures on 2 July which showed that a total of 2.72m units were sold in the first half of this year. This marks a 16.01% increase compared to the 2.34m vehicles sold in the first half of 2025. The passenger cars category was the one that posted the highest year-on-year increase, registering 1.09m units sold, up 23.67% compared to the 878,517 cars sold in January-June last year. Motorcycles also registered a significant increase, with 1.17m units sold in the first half of this year, up 14.10%, and sales for light commercial vehicle totalled 272,663 units, up 7.75%. However, truck sales were down 9.39% year-on-year, registering 48,030 units sold, while bus sales totalled 12,990 units, down 7.97% compared to January-June 2025.

Brazil & Southern Cone: inflation rate
Percentage variation (year-on-year)

Brazil & Southern Cone: GDP growth (%)
Quarterly figures are year-on-year growth