Brazil's Finance Ministry cuts 2026 GDP and inflation forecasts
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Brazil's Treasury Economic Policy Secretariat, in its September Macro-Fiscal Bulletin, lowered the 2026 GDP growth forecast from 2.3% to 2.0%, citing slower activity in the services and industrial sectors, partially offset by agriculture. The 2026 inflation forecast was cut from 5.1% to 4.9%, reflecting lower-than-expected food and service price rises in July, tight monetary policy, and an anticipated economic slowdown in the second half of the year. For 2027, GDP growth was revised down from 2.5% to 2.3%, while inflation was raised from 3.6% to 3.8%, partly due to the potential impact of El Niño on agricultural output. The government indicated that the interest rate cut 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 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 proceed at a slightly slower pace than previously anticipated. As a result, some 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%, lowers inflation outlook to 4.9%