Brazilian economy grows 2.3% in 2025
The Brazilian economy grew 0.1 percent in the fourth quarter of 2025 compared to the third quarter. With this performance, 2025 ended with 2.3 percent growth – the fifth consecutive year of growth.
The figures were released Tuesday morning (Feb. 3) by the statistics bureau IBGE.
In current values, Brazil’s GDP reached BRL 12.7 trillion last year. Per capita GDP reached BRL 59,687, a real growth (adjusted for inflation) of 1.9 percent from 2024.
The economic growth of Brazil over the last five years is as follows:
2021 – 4.8%;
2022 – 3%;
2023 – 3.2%;
2024 – 3.4%;
2025 – 2.3%.
Highlights
The GDP can be based on production (how well the economy is doing) or consumption (spending and investing). Looking at production, the data show growth across the board:
Agriculture – 11.7%;
Services – 1.8%;
Industry – 1.4%.
Agriculture accounted for 32.8 percent of GDP growth in 2025. The growth in this activity is mainly explained by increased production in various crops – such as corn (23.6%) and soybeans (14.6%), which reached record levels in 2025.
According to the IBGE, the service sector showed signs of recovery, with growth in all activities, particularly information and communication (6.5%).
The highlight in industry was oil and gas extraction, which contributed to the added value of extractive industries closing the year with a rise of 8.6 percent.
Household consumption
Household consumption grew 1.3 percent in 2025, driven by improvements in the labor market, increased credit, and government income transfer programs.
Although positive, the figure represents a slowdown compared to 2024’s 5.1 percent.
The explanation for the loss of momentum lies is said to be mainly in contractionary monetary policy – i.e., high interest rates.
Government consumption rose 2.1 percent in 2025.
Investments went up 2.9 percent in 2025. This performance was driven by more imports of capital goods (machinery and equipment) and software development, as well as growth in the construction industry.
The investment rate in 2025 was 16.8 percent of GDP, compared to 16.9 percent in 2024. The savings rate, in turn, was 14.4 percent in 2025, against 14.1 percent in 2024.
Monetary tightening
The monetary tightening that caused GDP to slow down in 2025 stems from high interest rates. In September 2024, concerned about the inflation, the Monetary Policy Committee of the Central Bank began to raise the economy’s benchmark interest rate, the Selic, then at 10.5 percent per year, to 15 percent in June 2025, where it remains to this day.
The Selic influences all other interest rates in the country and, when high, acts restrictively on the economy, i.e., it makes credit operations more expensive and discourages both investment and consumption.
The expected impact is lower demand for products and services, cooling inflation. The side effect is that a slow-moving economy tends to reduce job creation.
Despite the restrictive pressure, 2025 ended with the lowest unemployment rate ever recorded, as per official figures.
