Brazil’s economy grew 0.5% in the second quarter, outpacing median forecasts of 0.4% and accelerating from a revised 1.1% expansion in the prior three months, official data showed on Tuesday.
The year-over-year increase reached 2.0%, surpassing the expected 1.9%, while the first-half growth and the four-quarter accumulated expansion both stood at 1.9%. The quarterly performance left a statistical carryover of 1.8% for 2026, according to estimates by XP and Goldman Sachs.
Sectoral gains were uneven. Agriculture expanded 2.8% on the quarter, driven by soybean output, while oil and gas extraction rose 3.4%. Manufacturing and construction each contracted 0.4%, and utilities declined 1.1%. Overall industry grew 0.1%, while services rose 0.2% for a 24th consecutive quarterly increase. Within services, information and communications led with a 2.1% gain, while transport and financial activities lagged.
Household consumption fell 0.4% on the margin, defying expectations for a 0.6% rise, and government spending rose 0.4%. Gross fixed capital formation advanced 1.2%, and inventory accumulation contributed about 0.9 percentage points to growth. Exports declined 0.8% quarter-on-quarter but were up 3.8% year-over-year, while imports grew 1.8% quarter-on-quarter and 5.5% year-over-year, subtracting roughly 0.5 percentage points from headline GDP growth.
Analysts noted the mixed composition of the expansion. XP economist Rodolfo Margato said the overall result slightly exceeded expectations but carried a dovish tilt, while ASA’s Leonardo Costa described the composition as qualitatively weaker. Genial Investimentos’ Yihao Lin highlighted the 0.4% drop in household consumption as particularly relevant, adding that the qualitative breakdown pointed to a less favorable outlook than the headline figure suggested.
The central bank’s monetary policy committee, Copom, has delivered four consecutive 25-basis-point cuts to the Selic rate, bringing it to 14.00% from a peak of 13.75%. Markets expect another gradual reduction of 25 basis points at the September meeting, to 13.75%.
For 2026, the median market forecast ranges from 1.8% to 2.0% with downward biases. XP and Goldman Sachs maintain 2.0% projections, while Genial and ASA have trimmed their estimates to 1.9% and 1.8%, respectively. For 2027, estimates cluster between 1.0% and 1.5%.
The data, released by the statistics agency IBGE, underscores the uneven nature of Brazil’s recovery amid persistent consumption weakness and policy sensitivity to growth dynamics.
