LatinNews Daily - 24 July 2026

*The International Monetary Fund (IMF) has released the findings of its latest Article IV consultation with Brazil, stating that “Brazil’s economy has shown remarkable resilience in recent years despite a series of shocks, including global trade tensions”. The IMF predicted that GDP growth will rise to 2.4% in 2026, “amid positive terms of trade associated with higher global oil prices and fiscal support”, before “easing in 2027 on account of still-restrictive monetary conditions aimed at returning inflation to target”. The annual inflation rate is expected to close 2026 at 5.6% before gradually falling to the 3% target by mid-2028. Growth is then forecast to pick up over the medium-term to 2.5% due to the normalisation of monetary policy and other structural factors, such as the implementation of a 2023 reform to value-added tax (VAT) and a rise in hydrocarbon production. Brazil’s status as a net oil producer and its high share of electricity from renewable resources have left the country “relatively cushioned” from the rise in global oil prices caused by the war in the Middle East. The main risk highlighted by the IMF is “an escalation of geopolitical tensions, especially in the Middle East, which could increase inflation and, through tighter financial conditions and lower global demand, reduce economic activity”. On the domestic front, it warns that “a weaker‑than‑envisaged fiscal effort could increase uncertainty and add to inflationary pressures, resulting in higher borrowing costs and, ultimately, weaker growth”.

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