Brazilian economic activity showed growth in 2025, according to information released this Thursday (19) by the Central Bank (BC). THE Central Bank Economic Activity Index (IBC-Br) rose 2.5% last year compared to the previous period.
To the increases were 13.1% in agriculture, 1.5% in industry and 2.1% in services. The IBC-Br excluding agriculture rose 1.8% in the year.
In December 2025, the IBC-Br fell 0.2% compared to November, considering seasonally adjusted data (adjusted for the period). In comparison with December 2024, there was an increase of 3.1%, without adjustment for the period, as the comparison is between equal months.
In the quarter ending in December compared to the quarter ending in September 2025, the index increased by 0.4%.
The IBC-Br is a way of evaluating the evolution of the country’s economic activity and incorporates information on the level of activity in sectors of the economy – industry, commerce and services and agriculture –, in addition to the volume of taxes. It helps the BC’s Monetary Policy Committee (Copom) to make decisions about the basic interest rate, the Selic, currently set at 15% per year.
Inflation
Selic is the BC’s main instrument for achieving the inflation target, which is 3%, with a tolerance range of 1.5 percentage points up or down.
When Copom increases the Selic, the purpose is to contain heated demand; and this has an impact on prices because higher interest rates make credit more expensive and encourage savings. Therefore, higher rates help to reduce inflation, but they can also hinder the expansion of the economy.
When the Copom reduces the Selic, the tendency is for credit to become cheaper, encouraging production and consumption, reducing control over inflation and stimulating economic activity.
In January, the rise in prices of electricity and gasoline bills caused official inflation for the month to close at 0.33%, the same level as in December. According to the Brazilian Institute of Geography and Statistics (IBGE), the The result caused the Broad National Consumer Price Index (IPCA) to accumulate an increase of 4.44% in 2025, within the target tolerance range.
The retreat of inflation towards the target and these indicators, such as the IBC-Br, which show moderation in internal growth, led to maintenance of Selic for the fifth time in a rowat the last Copom meeting, at the end of January.
In the minutes, the Copom confirmed that it will begin reducing interest rates at the next meeting, in March, but did not indicate the magnitude of the cut and clarified that interest rates will remain at restrictive levels.
According to the authority, domestic economic activity maintained a moderate growth trajectory, operating above its expansion potential without putting pressure on inflation. Even so, the maintenance of interest rates at restrictive levels is due to the resilience of some factors that put pressure on prices “both current and expected”, especially the dynamism still observed in the labor market.
The Selic is at its highest level since July 2006, when it was at 15.25% per year. After reaching 10.5% per year in May 2024, the rate began to rise again in September of that year. Selic reached 15% per year at the June 2025 meeting, having been maintained at that level since then.
Gross Domestic Product
Released monthly, the IBC-Br employs a different methodology from that used to measure the Gross Domestic Product (GDP), which is the official indicator of the Brazilian economy published by IBGE. According to the BC, the index “contributes to the development of the country’s monetary policy strategy”, but “is not exactly a preview of GDP.”
GDP is the sum of all final goods and services produced by a country. Driven by the expansion of industry and agriculture, in the third quarter of 2025, the Brazilian economy grew 0.1% [https://agenciabrasil.ebc.com.br/economia/noticia/2025-12/economia-brasileira-cresce-01-no-terceiro-trimestre]which is considered by IBGE as stability. The release of the 2025 consolidated GDP is scheduled for March 3.
In 2024, GDP closed with an increase of 3.4%. The result represents the fourth consecutive year of growth, being the biggest expansion since 2021, when GDP reached 4.8%.
