Brazil’s central bank IBC-Br activity index rose 0.3% month-on-month in August, slightly above the market expectation of 0.2%. Industry led the gain, with services contributing less. The index is a monthly preview of quarterly GDP.
Quarterly measure still contracting
The quarterly measure fell 0.6%, a sign that the broader trend remains weak. Monthly gains were not enough to offset earlier declines, Goldman Sachs said. Alberto Ramos, head of Latin America economic research at the bank, made the point directly.
Felipe Rodrigo de Oliveira, chief economist at MAG Investimentos, said the 12-month cumulative growth held at 1.6%. He described that as consistent with a slowing economy. Combined with the 0.6% trailing contraction, he said, the figures suggest domestic demand is losing momentum.
Economists trim growth forecasts
Goldman Sachs cut its 2026 GDP growth projection to 1.8% from 2.0%. It lowered its 2027 forecast to 1.0% from 1.2%. XP projects 1.7% for 2026 and 1.0% for 2027.
Antônio Ricciardi, an economist at Daycoval, said the weakening began at the end of the second quarter. Third-quarter data now confirm it, he said. He expects no positive surprises in the fourth quarter.
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Risks tied to the Selic rate
The Selic policy rate stands at 13.75%. Economists link the slowdown to restrictive monetary policy. André Matos, CEO of MA7 Capital, said that if the pace holds, Brazil would grow below its potential for eight to ten quarters.
Antonio Patrus, CEO of Bossa Invest, named the main risk for 2027. The economy could return to growth without recovering its capacity to invest, he said.
Related: Brazil's economic activity index rises 0.30% in August
Source: central bank
