The International Monetary Fund (IMF) released a statement on Monday (Jun. 1) praising the “remarkable resilience” of the Brazilian economy in the face of the “multiple shocks” arising from the external and domestic pressures facing the country.

According to the organization, Brazil is “relatively protected from global oil price increases stemming from the war in the Middle East.”

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This assessment takes into account the country’s status as an oil exporter and the large share of renewable energy in its electricity generation.

The statements were released following the conclusion of the IMF’s annual mission to Brazil on Friday (May 29).

According to mission chief Daniel Leigh, the indicators “point to an economic recovery in early 2026,” which should lead to a “gradual strengthening of growth to around 2.5 percent in the medium term.”

Risks

Despite the positive assessment, the IMF warns of risks in the global environment.

“The risks to the growth outlook are tilted to the downside, including worsening geopolitical tensions and tightening financial conditions,” Leigh warned.

Nevertheless, the institution acknowledges that the country’s resilience rests on important pillars. “Brazil’s strong policy frameworks, robust financial system, adequate reserves, and flexible exchange rate regime continue to underpin resilience.”

The IMF considers the recent interest rate cut appropriate but urges caution in light of inflationary pressures. It also recommends maintaining and strengthening fiscal efforts to ensure debt sustainability and create room for investment.

According to the organization, structural reforms and the environmental agenda are expected to drive stronger and more inclusive growth in the medium term.

Finance

Finance Minister Dario Durigan commented on the IMF’s recognition of the Brazilian economy’s resilience and reaffirmed that the government’s main goal is to achieve sustainable annual growth of at least 4 percent.

According to him, this outcome will be driven by a significant increase in productivity.

Durigan advocated continuing the government’s efforts to improve state efficiency, “backed by political leadership capable of leading serious discussions with society on Brazil’s economic challenges and advancing a fair and sustainable growth agenda.”

According to the minister, dialogue with the IMF helps support macroeconomic management efforts aimed at balancing debt and controlling inflation, while strengthening social programs and environmental protection.

He reaffirmed the government’s fiscal commitment, even in the face of external shocks, as a way to ensure that measures to mitigate the impact of the crisis remain fiscally neutral.

The Brazilian economy grew 1.1 percent in the first quarter of 2026 compared to the last quarter of 2025. Over the past 12 months, there was a two percent expansion.

The gross domestic product (GDP) was announced Friday morning (May 29) by the statistics bureau IBGE.

Compared to the same period last year, GDP growth stands at 1.8 percent.

In current values, Brazil’s GDP reached BRL 3.3 trillion in the first quarter, approximately USD 646 billion.

Sectors

Comparing the two consecutive quarters, the three sectors surveyed showed growth – agriculture (2%), industry (1%), and services (0.5%).

Industry accounted for 23 percent of GDP in the first quarter. Within the sector, the activities that most drove growth were mineral extraction (3.6%) and construction (2.9%).

The services sector, which accounts for 70 percent of the Brazilian economy, was driven by growth in information and communication (2.4%), real estate (1.2%), other service activities (0.8%), and trade (0.6%).

Household consumption expenditure (1%) and gross fixed capital formation (3.5%), which measures the level of investment, were also on the rise. Government consumption rose 0.4 percent.

Exports fell by 1.7 percent, while imports went up 4.4 percent.
 

The financial market raised its 2026 forecast for Brazil’s official inflation from 4.92 percent to 5.04 percent. The estimate was published this Monday (May 25) in the weekly Focus bulletin by the Central Bank, which details the expectations of financial institutions for the main economic indicators.

The war in the Middle East and the resulting pressure on fuel prices and inflation led to an increase in the estimate for the 11th consecutive week. The 5.04 percent forecast is above the Central Bank’s target range of 3 percent, which has a tolerance margin of 1.5 percentage points.

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In April, food prices pressured official inflation, which reached 0.67 percent. According to the Brazilian government’s statistics agency IBGE, the 12-month accumulated index stood at 4.39 percent, still within the target range.

The inflation projection for 2027 edged up from 4 percent to 4.01 percent. For 2028 and 2029, the estimates are 3.65 percent and 3.5 percent, respectively.

Selic Rate

To achieve the inflation target, the Central Bank uses the basic interest rate (Selic) as its main instrument, which is currently set at 14.5 percent per year by the Monetary Policy Committee. At its last meeting in April, the committee reduced the Selic rate by 0.25 percentage points for the second time in a row, despite tensions surrounding the war.

In the document, the Central Bank stated that it is monitoring the conflict and the inflationary effects of a potential prolonged crisis. The Committee’s next meeting to set the Selic rate will take place on June 16 and 17.

GDP

Financial institutions’ estimate for Gross Domestic Product (GDP) growth this year rose from 1.85 percent to 1.89 percent. For 2027, the projection fell from 1.77 percent to 1.70 percent. For 2028 and 2029, the financial market expects GDP growth of 2 percent per year.

In 2025, the Brazilian economy grew by 2.3 percent, according to IBGE. Driven by expansion across all sectors, with agriculture as a key highlight, this result marks the fifth consecutive year of growth.