Brazil's Gross Domestic Product (GDP) expanded 2.3% in 2025, below the 3.4% of 2024, according to data released by the IBGE on Tuesday (3). The economy did not grow in the second half, with family consumption stagnant and productive investment declining, but government spending and exports prevented contraction. The slowdown stems from tighter monetary policy to control inflation.
The GDP data for 2025, released by the IBGE on March 3, 2026, show an expansion of 2.3%, lower than the 3.4% recorded in 2024. In the second half of 2025, the Brazilian economy recorded no growth: family consumption remained stagnant, while productive investment fell. Government spending and exports were the factors that prevented an overall contraction.
Performance was mainly supported by agriculture and extractive industry, sectors accounting for less than 11% of GDP but contributing nearly half of the annual growth. This sequence of positive surprises in economic activity, started after the Covid-19 pandemic and driven by public spending under the governments of Jair Bolsonaro and Luiz Inácio Lula da Silva, has been interrupted.
Fiscal stimulus reduced the credibility of public accounts, raised inflation, and led the Central Bank to increase interest rates to 15% per year. Donald Trump's management in the United States weakened the dollar, easing pressure on prices. Even so, 2025 growth exceeded the annual average of 1.4% seen between the end of the 2014-2016 recession and the start of the pandemic.
For 2026, the median of market forecasts compiled by the Central Bank is 1.8%, while the Finance Ministry projects 2.3%. The official assessment predicts recovery in industrial production and investments, supported by interest rate cuts, incentives for the industrial and civil construction sectors, and a reduction in Income Tax for the middle class. However, uncertainties include the presidential succession, doubts about the fiscal plan, and the potential impact of the war between the United States, Israel, and Iran, which could delay Selic cuts. The Central Bank's next decision on interest rates is scheduled for March 18.
GDP, calculated by the IBGE from the supply or demand perspective, measures the value added to the economy, excluding intermediate inputs. From the demand side, it includes family and government consumption, investments (FBCF), and the balance of exports and imports. Quarterly data are released about 60 days after the period, with definitive annual revisions two years later.
