The high level of the Selic Rate – the economy’s basic interest rate – was mainly responsible for the stagnation of the industry at the end of 2025, assessed the National Confederation of Industry (CNI), when commenting on the Monthly Industrial Surveyreleased this Tuesday (3) by the Brazilian Institute of Geography and Statistics (IBGE).
According to the entity, the high interest cycle, currently at 15% per yearmade credit more expensive and drained consumers’ appetite. The scenario was worsened by insufficient domestic demand and the increase in imports, which captured a significant part of the Brazilian market, maintains the CNI.
The director of Economics at CNI, Mário Sérgio Telles, assesses the loss caused by interest as “huge”.
“The punitive level of the Selic rate made credit more expensive to the productive sector, which held back investments, and reduced consumers’ appetite for industrial products. The damage caused by high interest rates is enormous. In 2024, with the lower Selic, domestic demand for goods from the manufacturing industry grew four times more than the demand recorded until November 2025”, highlighted Telles, in a note.
This weakening, highlighted the CNI director, resulted in higher-than-planned stocks and a 0.2% drop in production in the manufacturing industry, which converts raw materials into consumer goods.
The confederation’s analysis also warns of external pressure: purchases of consumer goods abroad jumped 15.6% last year. At the same time that the national industry slowed down, imported products filled the gaps, hampering any attempt at recovery by the local business community over the two semesters of 2025.
Drop in confidence
This joint effect severely impacted the Industrial Business Confidence Index (Icei), released at the end of January, which recorded the worst performance for the month in ten years. With the indicator operating below 50 points – the line that separates optimism from pessimism – for 13 months, the CNI diagnoses a persistent lack of confidence, which is paralyzing essential investments for the modernization and expansion of Brazilian factories.
For the CNI, without a change in interest rate policy and stimulus to domestic demand, this year’s growth is at risk. The entity fears that production inertia and low hiring intentions will continue, harming not only the manufacturing industry, but the performance of the entire national economy in the short term.
The IBGE survey confirmed the sector’s loss of momentum. Industrial production closed 2025 with growth of just 0.6%, a modest result compared to the 3.1% expansion recorded in 2024. The official survey details that the slowdown gained strength in the second half of the year, precisely following the monetary tightening.
