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[BUSINESS] · Brazil · 35 sources

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Brazil Central Bank lowers 2026 GDP growth forecast to 1.8%

The Central Bank of Brazil has revised its economic growth projections downward, lowering the 2026 GDP growth estimate from 2% to 1.8% and forecasting a 1.4% expansion for 2027. This revision follows a slowdown in economic activity, with GDP growing by 0.5% in the second quarter of 2026 after a 1.1% increase in the first quarter.

Inflationary pressures remain a concern. While the 12-month accumulated IPCA fell from 4.72% in May to 4.22% in August, the preliminary IPCA-15 for September rose to 0.7%, the highest since April. This acceleration was primarily driven by a 7.42% increase in residential electricity tariffs following the end of the Itaipu bonus. The Central Bank maintains its year-end inflation estimate at 5.2%.

Sectoral performance shows mixed results. While the agricultural sector faces potential slowdowns due to climate phenomena like El Niño and high producer debt, the services sector remains pressured by a tight labor market. Industrial activity has also faced challenges, with production indices hitting multi-year lows due to high interest rates and declining demand.

Entities

Banco Central do Brasil · Brazil · Central Bank of Brazil · Copom · Gabriel Galípolo · IBGE · Paulo Picchetti

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