Brazil’s forecast: cloudy with a chance of sunlight

Jul 09, 2026

On a recent research trip to Brazil, we met with companies and financial institutions and policymakers to gauge the temperature of an economy navigating high rates and political uncertainty.

Key takeaways:

  • Rate cuts delayed, not derailed: sticky inflation has paused Brazil's easing cycle for this year, however we expect rate cuts to resume in 2027 as conditions normalise.
  • A big political year: momentum has shifted in incumbent Luiz Inácio Lula da Silva’s favour, following corruption headlines surrounding Bolsonaro. However, with voting in early October, the narrative could still change.
  • Consumer resilience: bustling malls and thriving cosmetic retailers signal strong household spending, with management teams pivoting physical retail toward full-day experience destinations.
  • Banking sector stress is contained: larger banks have anticipated deterioration in agricultural credit and de-risked early, limiting broader contagion across the sector.
  • GLP-1s are a structural growth story: high obesity in Brazil, combined with very low current adoption rates, point to significant long-term growth potential for GLP-1 therapies.

Read our full piece here