{"id":94908,"date":"2025-07-15T19:37:27","date_gmt":"2025-07-15T22:37:27","guid":{"rendered":"https:\/\/murray.adv.br\/?p=94908"},"modified":"2025-07-15T19:37:27","modified_gmt":"2025-07-15T22:37:27","slug":"economic-activity-slows-following-record-breaking-harvest","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/economic-activity-slows-following-record-breaking-harvest\/","title":{"rendered":"Economic activity slows following record-breaking harvest"},"content":{"rendered":"<section class=\"content--header\">\n<div class=\"row content-head non-featured \">\n<div class=\"title\">\n<h6 class=\"content-head__title\" style=\"text-align: center\"><em><strong>Weak IBC-Br reading triggers GDP downgrades amid concerns over Trump tariffs<\/strong><\/em><\/h6>\n<\/div>\n<\/div>\n<div class=\"content__signa-share\">\n<div class=\"content__signature\">\n<div class=\"content-publication-data\">\n<div class=\"content-publication-data__text\">\n<div class=\"content-publication-data__from\"><\/div>\n<p class=\"content-publication-data__updated\">07\/15\/2025<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"content__share-bar-container\">\n<div class=\"content__share-bar\"><\/div>\n<\/div>\n<\/div>\n<\/section>\n<div id=\"mc-article-body\" class=\"mc-article-body \">\n<article>\n<div class=\"no-paywall\">\n<div class=\"mc-column mc-side-item__container\" data-block-type=\"ads\" data-block-id=\"1\"><\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"45\" data-block-id=\"2\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Brazil\u2019s economy showed clearer signs of cooling in May, following the boost from a record-breaking harvest this year. The slowdown comes as economists weigh the mixed impact of announced fiscal stimulus measures against potential fallout from the tariff shock led by U.S. President Donald Trump.<\/p>\n<\/div>\n<div class=\"wall protected-content\">\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"70\" data-block-id=\"3\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">The Central Bank\u2019s Economic Activity Index (IBC-Br), often viewed as a GDP proxy, fell 0.74% in May from April on a seasonally adjusted basis. The result, released on Monday, was below even the most pessimistic forecasts compiled by Valor Data\u2014Valor\u2019s financial data provider\u2014which ranged from a 0.5% contraction to a 0.5% expansion, with a median of -0.1%. The unexpected drop has prompted analysts to revise down their 2025 growth forecasts.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"24\" data-block-id=\"4\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">In April, the IBC-Br had posted a marginal increase of 0.05% (revised from 0.16%). Over the 12 months through May, the index rose 4.04%.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"61\" data-block-id=\"6\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">\u201cThe weakness in activity was broad-based, with monthly declines in agriculture (-4.25%) and non-agricultural sectors (-0.31%). Industry contracted 0.52% while services were flat, up just 0.01%,\u201d wrote Alberto Ramos, chief economist for Latin America at Goldman Sachs, in a note to clients. According to his estimates, the statistical carryover for second-quarter growth dropped from 0.83% in April to 0.16% in May.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"56\" data-block-id=\"7\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Rafaela de Sousa, an economist at BuysideBrazil, pointed out that this was the first monthly decline of the year for both the overall index and its non-agricultural component, reinforcing the narrative of weak activity in the second quarter. She warned that this is an important risk to monitor, given the potential impact of the U.S. tariffs.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"55\" data-block-id=\"8\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">BuysideBrazil maintains a 2025 GDP growth forecast of 2.3% but estimates that tariffs could affect up to 30% of Brazil\u2019s exports to the U.S. Under that scenario, the economy could lose as much as 0.6 percentage point of GDP over a 12-month period, with most of the drag occurring in 2026, said Ms. de Sousa.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"33\" data-block-id=\"9\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">XP Investimentos also sees downside risk to its current forecast of 2.5% GDP growth. According to the firm, Mr. Trump\u2019s tariffs alone could shave up to 0.3 percentage point from growth this year.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"67\" data-block-id=\"10\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Despite the recent data, economist Rodolfo Margato said the labor market and fiscal stimulus, whose effects have yet to show up in the numbers, should help prevent a sharp downturn in domestic activity. He calculates that May\u2019s IBC-Br result leaves a 0.2% statistical carryover for the second quarter, and expects the index to close the period with a 0.3% gain, close to XP\u2019s GDP projection of 0.4%.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"25\" data-block-id=\"12\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Oxford Economics revised its 2025 growth forecast to 2.2% from 2.5%. Still, economist Felipe Camargo does not foresee a major impact from the tariff dispute.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"46\" data-block-id=\"13\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">\u201cOur analysis is that the effect on growth will be limited, even if Brazil retaliates. We expect the two countries to reach an agreement in the coming months, though any deal is likely to involve tariffs higher than those in the pre-Trump era,\u201d said Mr. Camargo.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"77\" data-block-id=\"14\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Similarly, ABC Brasil downgraded its GDP forecast for this year to 2.3% from 2.5%. \u201cWhat stood out to us in the monthly and quarterly breakdown of the IBC-Br was the weaker performance of cyclical sectors, those more sensitive to interest rates,\u201d said Daniel Xavier, the bank\u2019s chief economist. He noted that the services and industrial sectors, which faltered in the May data, also showed a deterioration in FGV\u2019s business confidence index, suggesting further weakness may be ahead.<\/p>\n<\/div>\n<div data-track-category=\"multicontent\" data-track-action=\"ultimo chunk conteudo\" data-track-noninteraction=\"false\" data-track-scroll=\"view\">\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"75\" data-block-id=\"15\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">In terms of monetary policy, Mr. Xavier added that the IBC-Br reading should be well received by the Central Bank, as it aligns with the institution\u2019s scenario of 2.1% growth this year while also indicating cooling in cyclical sectors. \u201cNonetheless, the output gap remains inflationary, and for that reason, the Monetary Policy Committee (COPOM) is likely to maintain a restrictive stance and keep interest rates at a tight level for an extended period,\u201d he said.<\/p>\n<p data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">*By Marcelo Osakabe\u00a0and\u00a0Gabriel Shinohara\u00a0\u00a0\u2014 S\u00e3o Paulo and Bras\u00edlia<\/p>\n<p data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Source: Valor International<\/p>\n<p>https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Weak IBC-Br reading triggers GDP downgrades amid concerns over Trump tariffs 07\/15\/2025 Brazil\u2019s economy showed clearer signs of cooling in May, following the boost from a record-breaking harvest this year. The slowdown comes as economists weigh the mixed impact of announced fiscal stimulus measures against potential fallout from the tariff shock led by U.S. President [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[26249,26250],"class_list":["post-94908","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-economic-activity-slows","tag-following-record-breaking-harvest"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Economic activity slows following record-breaking harvest - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/economic-activity-slows-following-record-breaking-harvest\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economic activity slows following record-breaking harvest - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Weak IBC-Br reading triggers GDP downgrades amid concerns over Trump tariffs 07\/15\/2025 Brazil\u2019s economy showed clearer signs of cooling in May, following the boost from a record-breaking harvest this year. 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