Brazil Weaker Than Expected June Real GDP Growth (Ramos)

Economics Research 17 August 2026 | 8:34AM EDT

Brazil: Weaker Than Expected June Real GDP Growth (Ramos)

Bottom Line: According to the central bank’s monthly GDP indicator (IBC-Br), real activity Alberto Ramos | declined 0.64% mom sa in June, below consensus for -0.50% mom sa. The decline of Goldman Sachs & Co. LLC activity in June was driven by industry and to a lesser extent services; agriculture & livestock rose. Non-farm GDP declined 0.91% mom sa (+0.3% sa from Dec-25; offsetting the 0.31% mom sa May increase). The year-over-year 2.35% print beat the 2.30% consensus. According to the IBC-Br index—an imperfect proxy for the National Accounts quarterly GDP—real activity grew 0.18% qoq sa during 2Q26, vs 1.23% qoq sa during 1Q26. The carryover for 3Q2026 sequential growth starts at -0.42% qoq sa, and for 2026 is tracking at 1.3%.

Going forward, we expect real activity to continue to benefit from federal fiscal transfers to low-income households with a high propensity to consume, expansion of real household labor and non-labor disposable income, the payroll-collateralized and other upcoming lending programs, the increase in the exemption threshold for personal income tax, measures to ease debt service, and a number of fiscal/quasi-fiscal/credit measures ahead of the Q4 election, mitigated by tight domestic monetary and financial conditions, rising inflation, high levels of household indebtedness, and low levels of economic slack (unemployment rate below the NAIRU and output gap in positive territory). Gross household real disposable income expanded to a high 2.5% yoy (3mma) in June (4.6% yoy a year ago), which, allied with a strong labor market backdrop, should support spending in the coming months.

Real GDP (Jun): -0.64% mom sa (2.35% yoy); vs. consensus forecast at -0.5% (2.3% yoy) and GS -0.5%; prior revised +0.03% mom sa (from 0.07% mom sa).

1. According to the central bank’s monthly indicator of real GDP (IBC-Br) recorded a -0.64% mom sa variation in June, lower than the Bloomberg consensus for -0.50% mom sa. The May print was revised down by 4bp to 0.07% mom sa (Apr down by 14bp), and the May level down by 10bp. 2. The composition of the June real activity report was weak, dragged down by industry (-1.4% mom sa, +0.5% mom sa Apr), services (-0.5% mom sa, 0.1% mom sa Apr) and taxes (-1.0%). Agriculture & livestock rose 1.0% mom sa. Overall, non-farm GDP declined 0.9% mom sa (up 0.3% from Dec-25). 3. In annual terms, real GDP recorded a 2.35% yoy (1.2% yoy sa) variation in June, slightly above the +2.30% Bloomberg consensus; 0.9% yoy (2.0% yoy sa) in May.

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4. According to the IBC-Br index—an imperfect proxy for the National Accounts quarterly GDP—real activity grew 0.18% qoq sa during 2Q26, vs 1.23% qoq sa during 1Q26. 5. The carryover for 3Q2026 sequential growth is at -0.42% qoq sa and for 2026 at 1.3%.

Real GDP Growth Weakened in June (IBC-Br) Real GDP Growth Softened in 2Q26

Index: 2022=100 Index: 2022=100 18% 18% % yoy; n.s.a 150 150 15% 12m sum (% yoy; n.s.a.) 15% Trend (2.0-2.5%) 140 140 12% 12% IBC-Br (sa) 130 130 9% 9% 6% 6% 120 120 3% 3% 110 110 0% 0%

100 100 -3% -3% -6% -6% 90 90 -9% -9% 80 80 -12% -12% 70 70 -15% -15% '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '26 Jun-10 Jun-12 Jun-14 Jun-16 Jun-18 Jun-20 Jun-22 Jun-24 Jun-26

Source: BCB, Goldman Sachs Global Investment Research Source: BCB, Goldman Sachs Global Investment Research