Brazil GDP Grows 0.5% in Second Quarter of 2026

The Brazilian Institute of Geography and Statistics reported that Brazil's economy grew by 0.5% in the second quarter of 2026. While this figure slightly exceeded economist forecasts of 0.4%, it marks a significant slowdown from the 1.1% expansion seen in the first quarter. On an annual basis, GDP rose 2.0%.

Growth was primarily supported by a 2.8% expansion in the agriculture sector, while the industry and services sectors showed minimal gains. Conversely, household consumption contracted by 0.4%, the first decline in three quarters. This slowdown is attributed to restrictive monetary policy and high borrowing costs, as the Central Bank of Brazil maintained a benchmark interest rate of 14% to combat inflation, which was 4.24% in mid-August.

In response to the data, the Ministry of Finance announced it is reviewing its 2.3% full-year growth forecast with a downward bias. These economic indicators arrive as President Luiz Inácio Lula da Silva prepares for the October presidential election, where he is seeking a fourth non-consecutive term.