Brazil Trims 2026 Growth Forecast to 2.3% and Signals Possible Rate Easing

Overview

• The Finance Ministry’s macrofiscal bulletin lowers 2026 GDP growth to 2.3% from 2.4%, with a sharp slowdown in agriculture expected to be offset by stronger industry and services.
• Inflation is projected at 3.6% in 2026, below the target ceiling, with benefits from global goods supply and a weaker dollar but potential food price pressures and risks from geopolitics, trade frictions and a slower China.
• The government targets a primary surplus of 0.25% of GDP in 2026 and expects net revenue to reach 18.7% of GDP, citing stronger income-tax collection and the rollback of tax distortions.
• Officials say continued disinflation could allow a gradual monetary easing cycle during 2026; the Selic stands at 15%, and the central bank indicated it could begin cutting rates in March if inflation conditions hold.
• Industry group CNI warns the economy remains fragile after industrial output grew only 0.6% in 2025, credit slowed sharply, investment was curtailed and 84,200 industrial jobs were cut in the second half of last year.