IMF Staff Completes 2026 Article IV Visit to Brazil

IMF News, June 1, 2026

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Brazil’s economy has remained remarkably resilient in the face of multiple shocks.
Growth slowed in 2025, supporting disinflation.
High-frequency indicators point to an economic recovery in early 2026.
Growth is projected to recover in 2026 and strengthen to about 2.5 percent over the medium term.
Risks to the growth outlook are tilted to the downside, including from further deterioration of geopolitical tensions and tighter financial conditions.
Brazil’s strong policy frameworks, sound financial system, adequate reserves, and flexible exchange rate continue to support resilience.

Inflation declined through early 2026 but has recently picked up, reflecting high global energy prices.
The IMF expects inflation to rise in the near term before converging to the 3 percent target by mid-2028.
The central bank appropriately cut interest rates in March and April, consistent with Brazil’s inflation targeting framework.
The Central Bank of Brazil (BCB)’s recent policy easing has been appropriate.
Recommendation: Maintain flexibility in the pace and timing of future policy steps given elevated uncertainty and new inflation pressures.
Continued clear public commitment to the 3 percent inflation target is essential for reducing inflation and anchoring inflation expectations.

The authorities’ efforts to strengthen the fiscal position should continue.
Meaningful fiscal reforms are needed to place public debt on a firm downward path.
Policy recommendations:
- Save oil-related revenue windfalls, while providing targeted, temporary support.
- Mobilize revenues.
- Tackle spending rigidities.
- Reduce tax expenditures.
Expected policy outcomes: Strengthening public debt sustainability, reducing borrowing costs, and creating space for priority investments.
The authorities have taken steps to improve the fiscal position, but a more ambitious fiscal effort is required.

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.
Policy priorities:
- Reinforce banking and securities markets supervision.
- Address shortages in BCB staffing and strengthen their legal protections.

Structural reforms and the ecological transformation agenda are advancing and will foster stronger, more inclusive medium‑term growth.
The authorities have built new trading partnerships that will enhance the economy’s resilience.
Policy recommendations:
- Continue efforts to improve the business environment.
- Foster competition.
- Increase labor force participation.
- Advance decarbonization policies.
Expected impacts: Further strengthen productivity, investment, and inclusive growth.

Press Release No. 26/179
Date: June 1, 2026
An 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.
End-of-Mission press releases convey preliminary findings after a visit to a country; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
Statement excerpt: “Brazil’s economy has continued to demonstrate remarkable resilience in the face of multiple shocks... Growth slowed in 2025, reflecting the effects of restrictive monetary policy and reduced fiscal support, which helped lower inflation... We project growth to strengthen gradually to about 2.5 percent over the medium term.”

International Monetary Fund