Brasil

REGRESA

1. Fast pace: Brazilian Central Bank raises economic growth forecast

The Central Bank has revised its 2026 Gross Domestic Product (GDP) growth forecast from 1.6% to 2.0%. According to the Inflation Report released this Thursday (25th), the upward revision reflects the 1.1% expansion in economic activity during the first quarter, as well as improved prospects for the agricultural and extractive industries. Strong domestic consumption and credit stimulus measures also contributed to the revised outlook.

On the other hand, the Central Bank maintained its inflation forecast for this year at 5.2%, above the upper limit of the inflation target of 4.5%. International geopolitical tensions, such as the conflict in Iran, continue to put upward pressure on energy and fuel costs. The probability of inflation exceeding the target ceiling has risen to 79%, reinforcing expectations that the Selic rate will remain at elevated levels to help contain price increases.

O Globo: Banco Central eleva projeção de crescimento do PIB do Brasil para 2% em 2026 

2. Inflation preview slows to 0.41% in June, surprising the financial market

Brazil’s IPCA-15, the mid-month inflation index, rose 0.41% in June 2026, slowing from the 0.62% recorded in May, according to the Brazilian Institute of Geography and Statistics (IBGE). The result came below market expectations, which had forecast a 0.44% increase. With this reading, the inflation preview has accumulated a 3.45% increase year-to-date and stands at 4.80% over the past 12 months.

The Food and Beverages (+0.74%) and Housing (+0.72%) categories were the main drivers of inflation during the month, reflecting higher prices for staple goods and a 2.04% increase in electricity bills due to the activation of the yellow tariff flag. Together, these two categories accounted for approximately 66% of the overall index.

The main offset came from the Transportation category (-0.03%), supported by a 1.22% decline in fuel prices. Despite the softer monthly reading, analysts believe the inflation outlook still warrants caution, as the 12-month rate remains at a level that poses challenges for the Central Bank’s inflation target.

Exame: IPCA-15 avança 0,41% em junho e fica abaixo do esperado pelo mercado 

3. Higher interest rates: Analysts forecast Selic rate at 14% in 2026

Financial market analysts have raised their forecast for Brazil’s benchmark interest rate (Selic) from 13.75% to 14.0% per year by the end of 2026. According to the Central Bank’s Boletim Focus, released on Monday (22), the revision reflects growing concerns about inflation. The forecast for the IPCA consumer price index increased for the fifteenth consecutive week, rising from 5.30% to 5.33% for this year.

At the same time, expectations for economic growth improved slightly, with the 2026 GDP growth forecast edging up from 1.96% to 1.98%. In the foreign exchange market, analysts maintained their forecast for the U.S. dollar at BRL 5.20. The report reinforces expectations of a tighter and more restrictive monetary policy over the medium term as authorities seek to bring inflation back within the Central Bank’s target range.

Exame: Mercado aumenta expectativa e projeta Selic em 14% em 2026 

4. Weather drives food prices up as vegetable costs double in H1 2026

Despite the slowdown in food inflation in June, the prices of essential food items surged during the first half of 2026. According to IPCA-15 data released by the Brazilian Institute of Geography and Statistics (IBGE), tomato (+103.84%), carrot (+103.10%), and potato (+100.20%) prices more than doubled over the first six months of the year. Severe weather conditions in major producing regions, including extreme heat and excessive rainfall, significantly reduced the supply of these highly perishable crops.

The Food and Beverages category remained the largest contributor to June’s overall inflation rate, which rose 0.41%. During the month, the sharpest price increases were recorded for potatoes (+29.42%) and tomatoes (+17.27%). On the other hand, the category benefited from lower prices for ground coffee (-3.69%) and fruit (-0.96%), supported by improved harvest prospects. Food consumed away from home also showed slower inflation, easing from 0.51% to 0.40% compared with the previous month.

CNN: Tomate, cenoura e batata acumulam alta superior a 100% em 2026 

5. Congress ratifies Mercosur Trade Agreements with Singapore and EFTA

On Wednesday (24), the President of Brazil’s National Congress, Davi Alcolumbre, formally ratified Mercosur trade agreements with Singapore and the European Free Trade Association (EFTA), a bloc comprising Switzerland, Norway, Iceland, and Liechtenstein.

Under the agreement with Singapore, the Asian nation will immediately eliminate tariffs on all products imported from Mercosur. In return, the South American bloc will gradually phase out tariffs on 95.8% of goods imported from Singapore over a period of up to 15 years, while excluding sectors considered sensitive, such as machinery and plastics.

The agreement with EFTA opens access to a market of approximately 290 million consumers. The European countries will immediately eliminate tariffs on Brazilian industrial and fishery products, granting duty-free access to nearly 99% of the value of Brazil’s exports. The agreement also provides for tariff exemptions on approximately 97% of Brazil’s trade with the bloc and establishes import quotas for agricultural products.

CNN: Brasil oficializa acordos internacionais entre Mercosul, Singapura e EFTA