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1. High Selic rate pressures economy as IBC-Br indicates loss of momentum

The Central Bank kept the Selic rate at 15% per year, reinforcing its contractionary stance in the face of still-high inflation expectations and resilient economic activity. The decision reflects caution given the uncertain international scenario, especially with U.S. interest rates and trade tensions. With this decision, Brazil maintains the second-highest real interest rate in the world, behind only Turkey.

Meanwhile, the Central Bank’s Economic Activity Index (IBC-Br) registered a 0.5% drop in July, marking the third consecutive decline. The downturn was broad-based, affecting agriculture, industry, and services. Even so, the index has accumulated a 2.9% increase for the year and 3.5% over 12 months, showing overall growth despite the recent slowdown.

Despite the monthly drop, projections point to moderate GDP growth in 2025, around 2.2%. The Focus bulletin projects 2.16% for the year and a slight deceleration in 2026, indicating an economy in transition – still expanding in the longer term, but facing the immediate effects of interest rates at historically high levels.

Estadão: Copom mantém Selic em 15% ao ano pela 2ª vez seguida e ainda não dá sinal de corte de juros
Valor Econômico: Índice de Atividade Econômica do BC cai 0,53% em julho

2. Brazilian ports break historic cargo handling record in July

In July, Brazilian ports registered the largest volume of cargo ever handled in a single month: 124.7 million tons. Of the total, 73% came from long-distance navigation, while 20% was coastal shipping. In the first seven months of 2025, accumulated cargo handling reached 780.4 million tons, a 1.76% increase compared to the same period in 2024. The main cargo was solid bulk, totaling 76.6 million tons.

The federal government highlighted that the increase reflects the policy of expanding concessions and investments in port infrastructure. According to Minister Silvio Costa Filho, expanding port capacity strengthens exports and ensures greater competitiveness for Brazil. All types of cargo grew in July: liquid bulk rose 6%, solid bulk 4%, containers 3%, and general cargo nearly 1% compared to the same month of the previous year.

Agência Brasil: Portos movimentam em julho o maior volume de cargas da história

3. Service sector grows for sixth consecutive month

The service sector grew 0.3% in July, marking its sixth consecutive increase and reaching a new record high in the historical series. Between February and July, the sector accumulated 2.4% growth, the strongest streak since 2022. Compared to July 2024, activity rose 2.8%, while the 12-month cumulative growth reached 2.9%. The performance was driven by information and communication (1%), professional and administrative services (0.4%), and services for households (0.3%). Meanwhile, transportation and other services declined.

According to IBGE, the expansion was observed in 12 of the 27 states, with São Paulo, Paraná, and Rondônia standing out. The sector, the country’s largest employer, has benefited from accelerated digitalization since the pandemic, with rising demand for information technology and online platforms. This transformation, combined with the growth of delivery services and lower sensitivity to macroeconomic factors, explains its resilience in the face of the recent slowdowns in industry and retail.

Agência Brasil: Setor de serviços cresce 0,3% em julho, mostra IBGE

4. Unemployment reaches lowest level in 13 yearsinge menor nível em 13 anos

Brazil’s unemployment rate fell to 5.6% in the quarter ending in July, the lowest level since 2012, according to IBGE’s Continuous PNAD survey. The number of unemployed dropped to 6.1 million people, the lowest in the historical series, while the employed population reached 102.4 million, a new record. Among them, 39.1 million hold formal labor contracts, also the highest figure ever recorded.

IBGE highlighted that the decline in unemployment reflects a more dynamic labor market, with decreases in both underutilization of the workforce and in the number of people who have given up looking for jobs, which fell to 2.7 million people. This indicates that those who stop seeking employment are not giving up, but actually finding jobs, reinforcing the positive momentum of employment in the country.

CNN Brasil: Desemprego cai para 5,6% no trimestre até julho, menor taxa desde 2012

5. Mercosur steals historic agreement with EFTA

After eight years of negotiations, Mercosur and EFTA (Switzerland, Norway, Iceland, and Liechtenstein) signed a free trade agreement that eliminates tariffs on up to 97% of trade between the blocs. The deal covers strategic sectors such as meat, grains, chemicals, pharmaceuticals, and machinery, while also establishing quotas for products like corn, beef, and wine. The measure is expected to lower food prices and expand industry access to Europe, consolidating a market worth US$4.39 trillion and 290 million consumers.

The distinctive feature of the treaty is its environmental commitment: digital service providers will only gain access if their country of origin uses at least 67% clean energy. Foreign Minister Mauro Vieira highlighted the innovation from a sustainability standpoint, while European leaders emphasized the message of cooperation amid global uncertainties. For Brazil, in addition to opening new markets, the agreement could accelerate the conclusion of the Mercosur–European Union deal, further deepening trade integration.

Folha de S.Paulo: Mercosul e Efta assinam acordo comercial e incluem compromisso com energia limpa