Brazil's Finance Ministry 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 cut 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 lowered 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 reduced 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 cutting cycle may be 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 the latest Macro-Fiscal Report, revising key economic projections downward for 2026 and 2027.
2026 Forecasts
The report lowered the 2026 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.
The Ministry also reduced the 2026 inflation forecast from 5.1% to 4.9%, citing:
- Lower-than-expected food and service price increases in July
- The impact of tight monetary policy
- Expected slowdown in economic activity in the second half of the year
The report anticipates weaker economic activity in the latter half of 2026 and a slower pace of interest rate cuts than previously expected.
2027 Forecasts
For 2027, the Ministry adjusted its projections as follows:
- GDP growth: Lowered from 2.5% to 2.3%
- Inflation: Raised from 3.6% to 3.8%
The upward revision to the 2027 inflation forecast is partly attributed 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, with some of the economic recovery consequently postponed to subsequent years.
Source
新华财经Eastern
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Brazil cuts 2026 GDP growth forecast to 2.0%, lowers inflation outlook to 4.9%