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Brazil GDP growth projections revised downward by Ministry of Finance

Brazil's Ministry of Finance has revised its GDP growth projections downward, lowering the 2026 forecast from 2.3% to 2% and the 2027 forecast from 2.5% to 2.3%. The revision, detailed in the Macrofiscal Bulletin, cites the persistent effects of restrictive monetary policy and high interest rates on economic activity. The slowdown is expected to be most pronounced in the services and industry sectors.

While the government's outlook is more cautious, the OECD has raised its 2026 GDP growth forecast for Brazil to 2%. Conversely, the Central Bank of Brazil has provided a more conservative estimate, reducing its 2026 growth projection to 1.8% and forecasting 1.4% for 2027, citing weak consumer demand and uncertain external conditions.

Inflation expectations have also shifted. The Ministry of Finance lowered its 2026 IPCA inflation projection from 5.1% to 4.9%, though this remains above the upper limit of the target range. In contrast, the sector of agriculture showed resilience, with growth projections being increased to 2.8%.

Entities

Brazil · Central Bank of Brazil · Felipe Salto · Ministry of Finance · OECD · Secretaria de Política Econômica · Secretariat of Economic Policy

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