GlobalSource Partners | Country Insights

The government’s new budget forecasts indicate that the fiscal framework rules should be met in 2026, with the help of a spending freeze. However, in recent years, this has only been possible because the government lowered the targets, expanded deductions and resorted to parafiscal measures. On t...

Holding pattern

BRAZIL ECONOMICS · Report · 23 Sep 2026

The Copom Minutes, in line with the statement released after last week's meeting, brought relatively few new elements to the monetary policy discussion. This reinforces our view of another 0.25 p.p. cut at the next meeting, conditional on the election outcome, given the likely behavior of the cur...

Yellow alert

BRAZIL ECONOMICS · Report · 21 Sep 2026

The most recent activity indicators confirm the persistence of the slowdown that began in the second quarter. The intensity of this movement is surprising given the volume of stimulus to activity in an election year. The new measures effectiveness loss is partly explained by the accumulation of s...

The half empty cup(om)

BRAZIL ECONOMICS · Report · 17 Sep 2026

BCB’s Monetary Policy Committee (Copom) opted once again for a 0.25 percentage point reduction in the Selic target rate, from 14.00% to 13.75% per year, as expected. It also chose to keep the statement that followed the meeting virtually unchanged, itself an indication that it intends to maintain...

The bill has come due

BRAZIL ECONOMICS · Forecast · 14 Sep 2026

The external backdrop was complicated by two important developments that affected short-term interest rates and, more importantly, long-term rates. First, the continuation of the conflict in the Persian Gulf, far more persistent than expected. Although it is in the economic interest of both si...

Miserable new world

BRAZIL ECONOMICS · Report · 10 Sep 2026

The 2014-2016 recession is different from previous downturns due to the delay in the recovery and by the persistent departure from the pre-crisis path. Several counterfactuals, obtained using HP and Kalman filters, indicate that 2026 GDP would be, depending on the case, 15% to 27% below the level...

Fantastic unrealism

BRAZIL ECONOMICS · Report · 08 Sep 2026

The 2027 budget proposal projects a small primary surplus equivalent to 0.1% of GDP. In addition to falling far short of what is required to place debt on a stabilization path, the government’s estimate depends on an accelerated increase in revenues while economic activity weakens. The revenue pr...

Reality knocks at the door

BRAZIL ECONOMICS · Report · 01 Sep 2026

GDP grew 0.5% in the second quarter, well below the figure recorded in the first quarter of 2026, although slightly better than the average forecast of 0.4%, suggesting an economic slowdown, a theme to which we had drawn attention in our most recent reports. In recent quarters, the economy has...

Synthesis of the Brazilian Economy

BRAZIL ECONOMICS · Report · 31 Aug 2026

WHAT HAUNTS LULA IS THE DREAM OVER? - Just over one month before the election, the undefined picture is beginning to take shape, albeit still incipiently. Lula, whose government rejection rate is similar to its approval rate, is moving farther away from a fourth term; his best chance would be ...

The Half Empty Glass

BRAZIL ECONOMICS · Report · 24 Aug 2026

Gross public debt is expected to reach 83% of GDP by year-end, largely due to interest expenses. The real interest rate, however, is also a result of fiscal policy, which has affected the cost of debt at both short and long maturities. The recent increase in long-term international interest rates...

Heavy burden

BRAZIL ECONOMICS · Report · 17 Aug 2026

Economic activity slowed more than anticipated despite several stimulus measures announced for this year, concentrated in particular on credit extension. We see two kinds of limitations. First, the credit channel depends on institutions that select borrowers according to their own criteria, which...

Continuous cycle

BRAZIL ECONOMICS · Report · 12 Aug 2026

The Copom Minutes are, overall, more dovish than its previous version pertaining to the June meeting. Even so, although we expect the Selic rate target reach 13.75% per annum at the end of the year, that is, 0.25 p.p. below its current level, we do not have sufficient elements to determine whethe...

Contradictory signals

BRAZIL ECONOMICS · Report · 10 Aug 2026

Real wage decline in the second quarter comes in the context of an unemployment rate still near historical lows. This behavior of real income was not driven solely by inflation, which did in fact accelerate in the second quarter, but rather by a sharp slowdown in nominal wages. However, with a ti...

Lost horizon

BRAZIL ECONOMICS · Report · 06 Aug 2026

Once again, there was no surprise in the decision regarding the target for the Selic rate, which, we believe, may be an important part of the current monetary policy problem. The Monetary Policy Committee (Copom) reduced the benchmark interest rate by 0.25 p.p., to 14% per year, and “understands ...

Synthesis of the Brazilian Economy

BRAZIL ECONOMICS · Report · 03 Aug 2026

THE FROGS AND THE SCORPION As the nominal public deficit reached 10% of GDP in the 12 months ended in June, what previously concerned only economists, part of the financial market, and a few politicians has spilled over into broader circles, reaching the electoral arena.