Brazil cuts 2026 GDP growth forecast to 2.0%
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Brazil's Ministry of Finance, through its Economic Policy Secretariat, has released the Macro-Fiscal Bulletin, which revises key economic forecasts for 2026 and 2027. The 2026 GDP growth forecast was lowered from 2.3% to 2.0%, attributed to a slowdown in the services and industrial sectors, partially offset by agricultural performance. The 2026 inflation forecast was reduced from 5.1% to 4.9%, citing lower-than-expected food and service price increases in July, tight monetary policy, and an anticipated economic slowdown in the second half of the year. For 2027, the GDP growth forecast was cut from 2.5% to 2.3%, while the inflation forecast was raised from 3.6% to 3.8%, partly due to the potential impact of the El Niño phenomenon on agricultural production. The Brazilian government indicated that the interest rate cut cycle may be 'slightly slower' than previously expected, pushing some economic recovery into subsequent years.
Source report
São Paulo, September 26 (Xinhua / Yang Jiahe) — Brazil's Ministry of Finance, through its Economic Policy Secretariat, has released an updated Macro-Fiscal Report that revises key economic projections downward.
GDP Growth Forecasts
The report cuts Brazil's 2026 gross domestic product (GDP) growth forecast from 2.3% (projected in July) to 2.0%. The downward revision is attributed primarily to slower growth in the services and industrial sectors, partially offset by agricultural performance.
For 2027, the GDP growth forecast has been lowered from 2.5% to 2.3%.
Inflation Forecasts
The Ministry also adjusted its inflation expectations:
- 2026 inflation forecast: Reduced from 5.1% to 4.9%, driven by lower-than-expected food and service price increases in July, as well as the impact of tight monetary policy and anticipated economic slowdown in the second half of the year.
- 2027 inflation forecast: Raised from 3.6% to 3.8%, partly due to the potential impact of the El Niño phenomenon on agricultural production.
Monetary Policy Outlook
The Brazilian government now expects the interest rate cutting cycle to be "slightly slower" than previously anticipated. As a result, part of the economic recovery is expected to be delayed to subsequent years.
Source
新华财经Eastern
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Brazil cuts 2026 GDP growth forecast to 2.0%, inflation outlook to 4.9%