Brazil’s GDP grew by 0.5% in the second quarter of 2026, building on the 1.1% expansion recorded in the first quarter and surpassing market expectations of 0.4% growth. Economic activity continued to be underpinned by elevated government spending, which has supported household consumption in recent quarters, alongside measures aimed at easing access to bank credit. As a result, government expenditure rose 0.4%, while gross fixed capital formation climbed 1.2%.
However, persistent high inflation and elevated borrowing costs, driven in part by widening public deficits, weighed on household consumption, which declined 0.4%. External demand also dragged on overall growth: exports fell 0.8% even as imports increased 1.8%, leading to a negative contribution from net foreign trade.
On a year-on-year basis, Brazil’s GDP expanded by 2% in the second quarter, edging up from the 1.8% growth rate recorded in the first quarter.
