Photo: The Central Bank in Brasilia. File photograph. Marcello Casal Jr/Agência Brasil — CC BY 3.0 br.
Brazil’s central bank reduced its forecast for economic growth in 2026, projecting a slower expansion than it had expected earlier in the year. Its Monetary Policy Report, released on September 24, put GDP growth at 1.8% this year and 1.4% in 2027. The bank’s prior 2026 estimate had been 2.0%, Reuters reported. The official report says growth reached 3.4% in 2024 and 2.3% in 2025.
The revision reflects a cooling economy. The central bank said early indicators for the third quarter pointed to weaker activity than expected and that second-quarter growth was concentrated in sectors less sensitive to the business cycle, especially agriculture and extractive industries. More cyclical supply sectors and household consumption underperformed expectations. Reuters likewise reported that the bank expected a fading contribution from fiscal and credit stimulus, with a smaller boost from agriculture and extraction in 2027.
Inflation remained a complication. The central bank’s report said its projections were above the 3% target and that uncertainty was elevated, with risks on both sides. It cited resilient services prices, inflation expectations and demand stimulus among possible upward pressures, while weaker domestic or global growth and lower commodity prices could reduce inflation. Reuters reported a 3.1% projection at the horizon relevant to the November rate decision; the BCB’s published page gives a 3.2% projection for the first quarter of 2028, so the estimates should be read in their stated horizons and series.
The report does not decide the next interest-rate move. It provides a national baseline for households, firms and policymakers as Brazil heads into an election and a period of slower projected growth.