São Paulo – Brazil’s economy has shown remarkable resilience despite a series of shocks, and the country’s economy is expected to grow 2.4% this year, according to an assessment released by the International Monetary Fund (IMF) on Thursday (23).
The IMF said Brazil is relatively shielded from global oil price increases stemming from the war in the Middle East because it is a net oil exporter and relies heavily on renewable sources for electricity generation.
Growth is expected to be supported by higher oil prices and fiscal stimulus measures. In 2027, however, the pace is projected to slow as interest rates remain elevated to curb inflation. Over the medium term, the IMF forecasts growth of 2.5%.
Inflation is expected to reach 5.6% by the end of 2026 before gradually converging to the central bank’s 3% target by mid-2028.
However, the IMF warns that risks to Brazil’s growth outlook have worsened due to heightened global uncertainty. The fund cites escalating geopolitical tensions, particularly in the Middle East, as a factor that could fuel inflation and, through tighter financial conditions and weaker global demand, curb economic activity. According to the IMF’s assessment, global trade tensions could also weigh on foreign investment and trade.
The report said, however, that the IMF’s Executive Directors welcomed Brazil’s continued economic resilience, along with reductions in poverty and inequality, despite the challenging external environment. The directors praised the country’s strong economic fundamentals and policy framework, and called for stronger fiscal sustainability, measures to bring inflation back to target, and further structural reforms to support more inclusive growth.
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Translated by Guilherme Miranda
