Brazil: 2026 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil

Author: International Monetary Fund. Western Hemisphere Dept.

Volume/Issue: Volume 2026 Issue 191

Publication date: July 2026

ISBN: 9798229051415

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Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Exports and Imports , Inflation , Economics- Macroeconomics , Public Finance , Financial Sector Assessment Program , rate of exchange transaction , inflation expectation , Government Finance Statistics , exchange rate arrangement , IOF-FX tax , Inflation , Fiscal stance , Global , Middle East

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Summary

Brazil’s economy has shown remarkable resilience in recent years despite a series of shocks, including global trade tensions. Resilience is being tested again by the economic fallout of the war in the Middle East. Growth moderated in 2025 amid tight monetary policy and a gradual withdrawal of fiscal support, narrowing the positive output gap which, together with strong currency appreciation, supported disinflation. Medium-term inflation expectations remain above target. The Central Bank of Brazil (BCB) delivered three quarter-point cuts to the policy rate in the first half of 2026, after being on hold since mid-2025, but signaled greater caution regarding future interest rate cuts in light of upside inflation risks. Meanwhile, important fiscal and structural challenges remain, including high and rising public debt, and lagging productivity growth. General elections will be held in October 2026.