Brazil central bank cuts its 2026 growth forecast to 1.8 percent

Brazil's central bank lowered its 2026 economic growth forecast to 1.8 percent from 2.0 percent. Its September monetary policy report gives an initial 2027 growth forecast of 1.4 percent.

The bank expects inflation to rise from 4.4 percent in the third quarter to 5.2 percent at year end. That would exceed the 4.5 percent upper limit of its tolerance range for a second consecutive quarter.

Its reference scenario then has inflation declining to 3.2 percent in the first quarter of 2028, the current policy horizon. The target is 3 percent. The report says growth has moderated while the labor market remains strong.