It is higher than expected by the Brazilian government and the market
The International Monetary Fund (IMF) projected 2.2 percent growth for the Brazilian economy in 2026 in its World Economic Outlook report, released on Monday (Oct. 12)
In the previous version of the study, published in July, GDP growth was estimated at 2.4 percent. For 2027, the growth forecast was revised downward from 2.2 percent to 1.9 percent.
Despite the downward revision for 2026, the IMF’s projection remains higher than the Brazilian government’s own forecast. The September bulletin from the Secretariat of Economic Policy of the Ministry of Finance lowered its GDP growth estimate from 2.3 percent to 2.0 percent.
According to the Focus Bulletin – a survey conducted by the Brazilian Central Bank among financial market institutions – the forecast is for GDP growth of 1.85 percent in 2026 and 1.40 percent in 2027.
The IMF is a multilateral institution linked to the United Nations whose missions include maintaining the stability of the global financial system.
Brazil’s GDP growth forecast is one of the topics covered in the global report, which also points to slower growth in Latin America and an upward revision to the global growth forecast.
Interest rate pressure
In commenting on data from Brazil, Latin America’s largest economy, IMF analysts cite still-restrictive monetary conditions – that is, high interest rates – as one reason for the slowdown, along with the withdrawal of fiscal stimulus and international uncertainties.
The high interest rates cited by the IMF refer to the Selic rate, the Central Bank’s main tool for curbing inflation. The higher the Selic rate, the more expensive credit becomes, discouraging consumption and productive investment and thereby cooling the economy.
Currently, the Selic rate stands at 13.75 percent per year, down from 15 percent per year in March 2026, when the downward trend began.
Inflation on target
The IMF report also includes inflation projections. Experts expect Brazil’s inflation rate to end 2026 at 4.4 percent and 2027 at 4.1 percent.
Both estimates fall within the Brazilian government’s target range, which allows for inflation of up to 4.5 percent (a 3% target with a margin of 1.5 percentage points either way).
The study notes that several countries face the risk of renewed inflationary pressures due to rising global energy and food prices.
According to the Ministry of Finance, inflation in the country is expected to reach 4.9 percent in 2026 and 3.8 percent in 2027. The Focus survey estimates inflation at 5.22 percent this year and 4.30 percent next year.
Commodities
The IMF report mentions Brazil twice in its analysis of the commodities outlook (raw materials traded on international markets).
With regard to oil, the IMF emphasizes that prices are fluctuating widely due to the conflict in the Persian Gulf, where the Strait of Hormuz is located. Before the war began in the first quarter, the strait was a key route for 20 percent of global oil and petroleum product shipments.
The IMF notes that the market has responded by boosting production in countries outside the region, notably Brazil, Kazakhstan, the United States, and Venezuela.
The document also reports that agricultural prices rose due to higher grain and beverage prices. Coffee prices increased by 8 percent from March to August, following heavy rains in the state of Minas Gerais that delayed the harvest and heightened concerns about crop quality.
Labor market
Regarding the labor market, the IMF projects that Brazil’s unemployment rate will stand at 6.2 percent in 2026. For 2027, the projection is 6.8 percent.
The latest domestic data from the Brazilian government’s statistics agency IBGE show that the unemployment rate in the rolling quarter ending in August stood at 5.3 percent, the lowest ever recorded for that period since the institute’s historical series began in 2012.