Brazilian economy grows 0.7% in May, driven by household consumption
The Brazilian economy grew 0.7 percent from April to May. In the rolling three-month period ending in May, growth stood at 1.9 percent compared to the same span in 2025. With this performance, the expansion over the 12-month period stands at 1.7 percent.
The data come from the GDP Monitor, a monthly study prepared by the Brazilian Institute of Economics (Ibre) of the Getulio Vargas Foundation (FGV), released this Monday (Jul. 20).
The survey provides estimates of the behavior of the gross domestic product (GDP) based on figures from manufacturing, commerce, services, and agriculture.
May marks a return to growth after a decline in April and stability in March. Here is the increase month by month:
May – 0.7%;
April – -0.1%;
March – 0%;
February – 0.5%;
January – 0.7%.
Signs of a slowdown
Despite the resumption of growth in May, the 12-month indicator (1.7%), which provides a longer-term retrospective view, points to a slowdown. In March this year, the rate stood at three percent. In May last year, it was 3.8 percent.
FGV highlights that household consumption grew 3.3 percent in the quarter ending in May, reaching its highest level since the fourth quarter of 2024, when it rose four percent. Over 60 percent of this surge stemmed from consumption of services and durable goods.
Economist Juliana Trece, the survey’s coordinator, notes that household consumption was the main driver of the economy’s positive performance.
However, she pointed out a few “weaknesses” in Brazil’s GDP figures.
“Growth in agriculture follows a series of contractions; stability in the industrial sector indicates that the sector is losing momentum; and only the services sector posted results slightly better than the overall average at the beginning of the year,” she pointed out.
In her view, the concentration of growth in household consumption reflects a dependence on this component, given that exports and investments have declined.
“As a result, we can conclude that, even though the economy continues to grow, some important signs of a slowdown are beginning to appear in the data,” she said.
The GDP Monitor is one of the studies that serve as a barometer of the Brazilian economy. Another survey is the Central Bank’s Economic Activity Index (IBC-Br), released on Friday (17), which indicated growth of 0.1 percent from April to May and 1.4 percent over the past 12 months.
Expectations
This week’s Focus readout – a survey conducted by the Central Bank (BC) with financial market institutions – estimates that the Brazilian economy will end 2026 with 1.99 percent growth.
The Ministry of Finance’s forecast is for 2.3 percent growth.
