Brazil Industrial Output Rises 0.2% Ending Two-Month Decline

The Brazilian Institute of Geography and Statistics reported that Brazil's industrial output rose 0.2% in July 2026, breaking a two-month streak of declines. The growth fell short of the 0.5% median forecast from the Broadcast survey and the 0.6% expected by Reuters. Capital goods grew by 2.4% and consumer goods by 0.3%, while intermediate goods contracted by 0.2%. On a yearly basis, production shrank 0.5% compared to July 2025, driven largely by a 6.9% drop in chemical products.

André Macedo of the statistics institute noted that the July reading was not a change of direction, but that production has stopped falling. Despite the slight monthly increase, high interest rates and household debt continue to limit industrial investment and purchasing power.

Concurrent financial data shows significant capital flight, with foreign investors withdrawing a net 18.1 billion reais from B3 shares in August. This represents the heaviest outflow since the start of the pandemic, which analysts link to a stronger dollar and rising U.S. bond yields. The central bank has reduced the Selic policy rate to 14% following four cuts since March, but credit rating agencies and financial institutions remain cautious about the long-term investment climate.