The Brazilian economy grew 0.5% in the passage from the first to the second quarter. The result shows slowdown, since, in the first quarter, the increase had been 1.3%.
The estimates are from the Gross Domestic Product Monitor (GDP)monthly study of the Brazilian Institute of Economics (IBRE) of the Getulio Vargas Foundation (FGV), released on Monday (18), in Rio de Janeiro.
The survey presents estimates on the behavior of GDP, set of all goods and services produced in the country, and serves as a prior official data, released by the Brazilian Institute of Geography and Statistics (IBGE).
From May to June, there was also expansion of 0.5%, according to FGV. These data are deemed, that is, typical variations of the time of year, so that the effects of the calendar (for example, difference in the number of business days) do not distort the comparison between different periods.
The GDP monitor points out that the Brazilian economy grew 2.4% in the second quarter compared to the same period of 2024. In the accumulated 12 months, the expansion is 3.2%. In monetary terms, FGV estimates the GDP of the first half of R $ 6.109 trillion.
High Interest Brake
Juliana Trece, Ibre economist, explained that the growth of the second quarter is due to the performance of the service and industry sectors. In services, it details it, “this growth has been widespread in most activities.”
In industry, positive performance was concentrated in extractive activity, “which shows greater sector fragility”.
According to TREEC, the “relevant slowdown” of growth In the second quarter it can be attributed both because there was no strong positive contribution from agriculture in the first quarter, as well as the “outdated effect of the high level of interest on economic activity”.
The survey shows that families consumption, despite showing growth, has declined numbers since the end of 2024. In the fourth quarter of that year, the expansion was 3.7%. In the first quarter of 2025, 2.6%; and in the second quarter, 1.5%. All comparisons are in relation to the same period as previous years.
Why high interest rates?
The escalation of interest began in September last yearwhen the basic rate (Selic) came out of 10.5%per year and, gradually, reached the current 15%, higher level since July 2006 (15.25%).
The Selic rate is decided every 45 days by the Central Bank Monetary Policy Committee (COPOM) and consists of the main way for the institution to make the government -stipulated goal – 3% per year with 1.5 percentage point tolerance for plus or less. Since September 2024, the Broad National Consumer Price Index (IPCA) has been above the goal ceiling (4.5%).
One face of high interest rate is the considerationist effect, which fights inflation. Raising the rate makes loans more expensive – either for individuals or companies – and discourages investments, as it can be more worth keeping the money invested, yielding high interest rates than risking productive activities.
This set of effects brakes the economy. Hence comes the negative reflection: less activity tends to be synonymous with less employment and income. According to the Central Bank, Selic’s effect on inflation takes six to nine months to become significant, coinciding with the perception of the GDP monitor.
Official GDP
The GDP monitor is one of the studies that serve as a thermometer of the Brazilian economy. Another survey is the Central Bank’s economic activity index (IBC-BR), also released this Monday (18), which indicated 0.3% expansion in the first quarter passage. In 12 months, IBC-BR rises 3.9%.
The official result of GDP is presented quarterly by the Brazilian Institute of Geography and Statistics (IBGE). The disclosure regarding the second quarter will be on September 2.
