The International Monetary Fund (IMF) reduced the Brazilian economy’s growth projection in 2026, in a move that contrasts with the upward revision of the global economy’s performance. According to the organization, the main factor behind the cut is the maintenance of a restrictive monetary policy in the country, adopted to contain inflation.
According to the update of the Global Economic Perspective report, released this Monday (19), Brazil was one of the few large countries to register a negative revision in estimates for 2026.
Brazil: main figures revised by the IMF
- 2026: growth of 1.6%, a drop of 0.3 percentage points compared to the previous projection (1.9%);
- 2025: projection raised from 2.4% to 2.5%;
- 2027: estimate increased from 2.2% to 2.3%.
Previous estimates were released in October. According to the IMF, the weaker performance in 2026 reflects the lagged effects of monetary tightening. The basic interest rate (Selic) is at 15% per year, the highest level in almost two decades, and has been maintained at that level since August 2025.
“The weaker prospects for Brazil are mainly linked to the restrictive monetary policy adopted to contain high inflation last year”, explains the Fund.
Despite the slight improvement expected for 2025 and 2027, the IMF assesses that the country still feels the impacts of high interest rates, which limits the expansion of economic activity in the short term.
Artificial intelligence
While Brazil had its projection reduced, the global scenario was revised upwards, supported mainly by the advancement of investments in technology and artificial intelligence (AI).
Global growth in 2026:
- 3.3%, increase of 0.2 percentage points
- 2025: also 3.3%, up 0.1 percentage points
- 2027: 3.2%, no change
The IMF’s chief economist, Pierre-Olivier Gourinchas, highlighted the resilience of the world economy, even after the trade and tariff tensions registered in 2025.
“The global economy is shaking off trade and tariff unrest and doing better than we expected,” he said.
Latin America
Brazilian performance was also below the regional average. For Latin America and the Caribbean, the IMF projects growth of 2.2% in 2026 and 2.7% in 2027, above the pace expected for Brazil.
Emerging and developing economies are expected to grow 4.2% in 2026, reinforcing the isolated nature of the Brazilian negative review in the report.
Alert
Despite global optimism, the IMF warns that global growth is concentrated in a few countries and sectors, especially those linked to artificial intelligence. If expectations of productivity gains are not confirmed, the fund assesses that there may be corrections in the financial markets.
For Brazil, the assessment is one of caution. Even with signs of improvement in the coming years, the high cost of credit remains the main brake on economic growth, according to the IMF.
