The Omie Index of Economic Performance of SMEs (IODE-SMEs) indicates that the revenue of small and medium-sized Brazilian companies (SMEs) contracted by 1.2% in the first quarter of this year compared to the same period in 2024. Despite the macroeconomic challenges on the radar, the basic outlook for the Brazilian economy does not indicate a complete halt to growth. The index is expected to show a 1.3% expansion for the year, reinforcing the outlook that 2025 will be characterized by more moderate activity, especially compared to the last three years.
Felipe Beraldi, economist and manager of Indicators and Economic Studies at Omie, a cloud 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 a modest growth of the SME market throughout 2025.
"The recent behavior of the sector reinforces the expectation of growth aligned with the general projections for the Brazilian GDP — with the median of estimates currently around 2%, according to the Central Bank's Focus Bulletin. This scenario contrasts with recent years, when the SME market evolved 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 families' income, driven by the rise in real wages in recent months. In the 12-month period ending in March 2025, the average real wage growth in Brazil increased by 4.4%, remaining at a level significantly higher than the pre-pandemic period — 8.1% above the 2019 average.
Nonetheless, inflationary pressures and the high levels of the basic interest rate (Selic) are expected to continue restricting consumption and investments in the country, with effects on the SME market — especially in segments more dependent on credit, such as industries, commerce, and construction.
"Although the economic situation is more challenging and requires constant monitoring, it is essential 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 to be implemented gradually from 2026, with significant implications for the competitiveness of various companies, including those opting for the Simples Nacional," warns Beraldi.
