The Brazilian economy fell 0.3% in October compared to September. The result is the second consecutive month with a drop in economic activity. In September, the decline was 0.6%.
The explanation for the loss of momentum is the high level of interest rates, which serves as a brake on the economy.
Compared to October 2024, there was a 1% expansion in the Gross Domestic Product (GDP, sum of all goods and services produced in the country).
In the moving quarter ending in October, there was growth of 1.5% compared to the same quarter in 2024. In the 12-month period, Brazilian GDP increased 2.3%.
The data is part of the GDP Monitor, a monthly study prepared by the Brazilian Institute of Economics (Ibre) of the Getulio Vargas Foundation (FGV), released this Tuesday (16).
High interest
According to economist Juliana Trece, responsible for the survey, the loss of momentum in the economy is “very influenced by the high level of interest rates”.
The basic interest rate in the country, the Selic, is 15% per year, the highest level since July 2006, when it was 15.25%.
The Selic is set by the Monetary Policy Committee (Copom) of the Central Bank (BC), which defends the high level as a way to combat inflation, which only returned to the limit of the government’s target in Novemberafter being outside the tolerance space for 13 months.
High interest rates make the entire credit chain more expensive and discourage investment, which tends to reduce demand for goods and services, in order to curb rising prices. The side effect is the cooling of economic activity, with less power to generate jobs and income.
Behaviors
The behavior of GDP can be measured from the perspective of demand (who is spending) or production (who produced).
“From a production perspective, the performance of agriculture and industry helps explain the drop in economic activity”, explains Juliana Trece.
“From the perspective of demand, investments [formação bruta de capital fixo] and government consumption contributed negatively to the result”, he adds.
Comparing the moving quarter ended in October with the same period last year, household consumption grew 0.5%.
The consumption of non-durable and durable goods contributed negatively to performance, while the consumption of services and semi-durable goods compensated for the declines and maintained the component in the positive field.
Exports, which also helped boost the economy, grew 8.9% in the moving quarter, driven by agricultural products and the mineral extractive industry. The behavior of foreign sales has shown an increasing trend in all moving quarters since March 2025.
In monetary terms, FGV estimates Brazilian GDP accumulated up to October at R$10.530 trillion.
Official result
The GDP Monitor is one of the studies that serve as a thermometer for the Brazilian economy.
Another survey is the Central Bank Economic Activity Index (IBC-Br), released on Monday (15), which indicated a decline of 0.2% from September to October and growth of 2.5% in the last 12 months.
The official GDP result is presented quarterly by the Brazilian Institute of Geography and Statistics (IBGE). On December 4, the institute reported that the economy grew 0.1% in the third quarter and 2.7% in 12 months.
IBGE will release GDP for the fourth quarter of 2025 on March 3, 2026.
