The Omie Index of Economic Performance for SMEs (IODE-SMEs) indicates that the revenue of small and medium-sized Brazilian enterprises (SMEs) recorded a 1.2% contraction in the first quarter of this year compared to the same period in 2024. Despite macroeconomic challenges on the horizon, the baseline scenario for the Brazilian economy does not indicate a complete halt in growth. The index is expected to show a 1.3% expansion this year, reinforcing the perspective that 2025 will be marked by more moderate activity, especially compared to the last three years.
Felipe Beraldi, an economist and manager of Economic Indicators and Studies at Omie, a cloud-based management (ERP) platform, explains that although the negative result at the beginning of the year was largely influenced by the deterioration of economic agents’ confidence, expectations still point to modest growth in the SME market throughout 2025.
“Recent sector behavior reinforces the expectation of growth aligned with general projections for Brazilian GDP—with the median of current estimates around 2%, according to the Central Bank’s Focus Bulletin. This scenario contrasts with recent years when the SME market grew at a faster pace than the economy as a whole,” says the economist.
The main factor supporting this projection, according to Beraldi, is the continued increase in Brazilian household income, driven by the rise in real labor earnings in recent months. Over the 12 months leading up to March 2025, the average real labor income in Brazil grew by 4.4%, remaining significantly higher than pre-pandemic levels—8.1% above the 2019 average.
Nevertheless, inflationary pressures and the high levels of the benchmark interest rate (Selic) should continue to constrain consumption and investments in the country, with repercussions for the SME market—particularly in sectors more dependent on credit, such as manufacturing, retail, and construction.
“Although the economic environment is more challenging and requires constant monitoring, it is crucial for entrepreneurs to also be aware of the impacts of the Tax Reform on their businesses. The measure is a reality for the Brazilian economy and will begin gradual implementation starting in 2026, with significant implications for the competitiveness of various companies, including those enrolled in Simples Nacional,” warns Beraldi.
