Brazil GDP Rises 1.1% in First Quarter as Economists Warn of Slower 2026

Overview

• The official GDP reading published May 29–30 reported 1.1% growth in the first quarter, led by a 2.9% rise in construction, a 2% gain in agriculture and stronger extractive activity tied to oil.
• Economists surveyed by major outlets now expect full-year 2026 growth of roughly 1.5% to 2%, reflecting forecasts of much weaker quarters after the strong start.
• The Central Bank’s Selic rate at 14.5% is increasing credit costs, which is pressuring investment and finance-heavy sectors and limiting a broader recovery.
• Early-year government stimulus and a tight labour market have supported household consumption and short-term demand but may complicate monetary easing by keeping inflation and interest-rate risk elevated.
• Falling exports after four positive quarters and low investment—about 16.5% of GDP—pose medium-term risks to sustainable growth and could keep policy makers cautious.