BRASILIA, Sept. 22 (Xinhua) -- Brazil cut its 2026 GDP growth forecast from 2.3 percent to 2.0 percent on Tuesday, while anticipating a more gradual interest rate-cutting cycle and weaker economic activity during the second half of the year.
In a Macro-Fiscal Bulletin, the Finance Ministry's Economic Policy Secretariat ascribed the downgrade to a slowdown in the services and industrial sectors, partially offset by the performance of the agricultural sector.
Regarding inflation, the ministry lowered its 2026 forecast from 5.1 percent to 4.9 percent after price increases in July came in lower than expected, particularly for food and services.
For 2027, it cut its GDP growth forecast from 2.5 percent to 2.3 percent and raised its inflation estimate from 3.6 percent to 3.8 percent, citing factors such as the potential impact of the El Nino weather phenomenon on agricultural production.
The government noted that the reduced economic momentum reflects an interest rate-cutting cycle that is "marginally more gradual than previously anticipated," which would push back part of the economic recovery to subsequent years. ■
