End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
- Brazil’s economy has remained remarkably resilient in the face of multiple shocks. After slowing in 2025, supporting disinflation, growth is projected to recover in 2026 and strengthen to about 2.5 percent over the medium term.
- The central bank appropriately cut interest rates in March and April, consistent with Brazil’s inflation targeting framework. Maintaining flexibility in further policy steps is warranted given elevated uncertainty and new inflation pressures from high global energy prices.
- The authorities’ efforts to strengthen the fiscal position should continue. Saving oil-related revenue windfalls, while providing targeted, temporary support, mobilizing revenues, and tackling spending rigidities would strengthen public debt sustainability, reduce borrowing costs, and create space for priority investments.
- Structural reforms and the ecological transformation agenda are advancing and will foster stronger, more inclusive medium‑term growth.
Washington, DC: An International Monetary Fund (IMF) team, led by Daniel Leigh, conducted discussions for the 2026 Article IV Consultation with the Brazilian authorities and engaged with other stakeholders during May 18 – May 29, 2026. At the conclusion of the visit, Mr. Leigh issued the following statement:
“Brazil’s economy has continued to demonstrate remarkable resilience in the face of multiple shocks. Brazil is relatively cushioned from global oil price increases stemming from the war in the Middle East by its status as a net oil exporter and the high share of electricity from renewable energy sources. Growth slowed in 2025, reflecting the effects of restrictive monetary policy and reduced fiscal support, which helped lower inflation. High-frequency indicators point to an economic recovery in early 2026 and we project growth to strengthen gradually to about 2.5 percent over the medium term.
“Inflation declined through early 2026 but has recently picked up, reflecting high global energy prices. We expect inflation to rise in the near term before converging to the 3 percent target by mid-2028.
“Risks to the growth outlook are tilted to the downside, including from further deterioration of geopolitical tensions and tighter financial conditions. At the same time, Brazil’s strong policy frameworks, sound financial system, adequate reserves, and flexible exchange rate continue to support resilience.
“The Central Bank of Brazil (BCB)’s recent policy easing has been appropriate, and maintaining flexibility in the pace and timing of future steps is warranted, amid heightened uncertainty surrounding the war in the Middle East and new inflation pressures. Continued clear public commitment to the 3 percent inflation target will remain essential for reducing inflation and anchoring inflation expectations.
“The authorities have taken steps to improve the fiscal position. Meaningful fiscal reforms are needed to place public debt on a firm downward path. Saving oil-related revenue windfalls, while providing targeted, temporary support, and implementing a more ambitious fiscal effort—supported by reforms to address spending rigidities and reduce tax expenditures—would enhance fiscal credibility, lower borrowing costs, and create space for priority investments.
“As highlighted in the concurrent IMF Financial Sector Assessment Program (FSAP), the financial sector remains resilient, with banks well capitalized and liquid. Continued vigilance is warranted, particularly regarding household credit risks. Reinforcing banking and securities markets supervision—including by addressing shortages in BCB staffing and strengthening their legal protections—are priorities.
“Structural reforms and the ecological transformation agenda are supporting medium-term growth prospects. The authorities have built new trading partnerships that will enhance the economy’s resilience. Continued efforts to improve the business environment, foster competition, increase labor force participation, and advance decarbonization policies would further strengthen productivity, investment, and inclusive growth.
“The IMF team would like to thank the authorities, private sector representatives, academic institutions, and civil society organizations for their excellent cooperation and constructive discussions.”