After growing 2.5% in 2025, the Brazilian economy is expected to grow 1.8% in 2026, according to a projection by the National Confederation of Industry (CNI) released this Wednesday (10). The estimates are contained in the Brazilian Economy Report 2025-2026, which points out that the pace of activity will continue to be pressured by the high level of interest rates and the weakening of the job market.
High interest
According to the CNI, the Selic rate will end 2026 at 12% per year, compared to the current 15% per year. Inflation should close the year at 4.1%, within the target range of 3%, with a tolerance band of 1.5 percentage points more or less.
Real interest (difference between interest and inflation) is estimated at 7.9% for next year. Above the neutral interest rate of 5% per year, in the entity’s assessment, interest continues to limit investment and economic growth.
According to the CNI, the combination of expensive credit, weaker domestic demand and increased imports should continue to affect the industry, especially manufacturing, which is expected to grow just 0.5% next year, the worst performance among industrial segments.
The services sector should be the main engine of economic expansion next year, with an increase of 1.9%, according to the report.
Construction must react
Despite the difficulties, some sectors have positive prospects. Construction should advance 2.5% in 2026. According to the CNI, the new real estate credit model, the increase in the ceiling of the Housing Financial System (SFH) and the expansion of financing for Minha Casa, Minha Vida and for low-income housing reforms should boost the sector, even with high interest rates.
The extractive industry is expected to grow 1.6%, supported by the strong volume of oil and iron ore production. Despite the expansion, growth represents a strong slowdown in relation to 2025, when the segment is expected to grow 8%.
Agriculture, on the other hand, tends to “move sideways” in 2026, with zero expansion, given initial projections of a harvest much less significant than that of 2025. In 2025, according to the CNI, the sector is expected to grow 9.6%, maintaining the GDP growth of 2.5% for this year predicted by the entity.
Exports
In relation to exports, the CNI report highlights that the closing of commercial partnerships and the opening of markets partially offset the impacts of tariffs imposed by the United States. In the case of the manufacturing industry, the entity highlighted, the biggest increases were in China, the United Kingdom, Italy and Argentina.
For 2026, the CNI projects a 1.6% increase in exports, considering factors such as a more modest harvest, North American tariffs and lower global demand for oil. The performance of the Argentine economy should also weigh negatively.
Brazilian exports are expected to reach US$350 billion in 2025, an increase of 3% compared to 2024, driven by commercial partnerships and the record harvest. Imports are expected to grow 7.1%, reaching US$293.4 billion, driven by the fall in international prices, the trade diversion caused by the new United States trade policy, the appreciation of the real and the increase in family income.
As a result, the trade balance should be US$56.7 billion, a drop of 14% year-on-year.
Caution
The confederation’s estimates indicate a scenario of moderate growth, supported by the services sector and specific industry niches, but limited by high interest rates and the slowdown in domestic demand. The CNI reinforces the need for policies that encourage investments and strengthen the sectors most affected by the current economic environment.
