Brazil‘s Economic Growth Projected to Slow, Potential for Contraction in Q4
RIO DE JANEIRO, BRAZIL – Brazil’s economic โขmomentum is expected to wane in the coming months, โwith projections indicating a slowdown in the second quarterโค andโค a potential for stagnation or even negative growth in the fourth, according to economists. Whileโค the economy experienced robust growth in โขthe first quarter, factorsโค including tighter monetary policy, a higher comparison base, and recently imposed U.S.tariffs are contributing to increasing uncertainty.
Economists anticipate a 0.5% growth inโ the second quarter, with full-year expectations ranging from 2% to 2.3%, despite a recent slowdown. However,โฃ these โขforecasts carry a “low bias” due to both domestic and international uncertainties.
“We see a total GDP around zero orโค even slightly negative,” stated Margato, highlighting concerns for the fourth quarter. The absence โคof a “precatory effect” – aโ one-time boost from previous measures – coupled with the lagged impact of monetary tightening, is expected โto weigh on growth.
the imposition of tariffs by U.S. President Donaldโ Trump adds another layer of complexity. Potential impacts on Brazilian industrial sectors and exports are generating market uncertainty, which can stifle investment.
“When we add uncertainty, even though, effectively, โthe dataโ may not be so bad, investors start to get a littleโ silent because theyโค do not know what will happen,” explained Juliana Trece, an economist at Ibre/FGV.”Usually they expect more facts, and this is bad asโค investment decisions precede the result we will see in the economic activity up front.”
The upcoming releaseโ of โขthe iPhone 17, boosted by new AI features in iOS 26, isโฃ also noted as a potential โฃdriver of economic activity.