Brazil's Economic Activity Expands 2.5% in 2025, Driven by Robust Agricultural Sector

Brazil's Economy Achieves 2.5% Growth in 2025

Brazil's economic activity expanded by 2.5% in 2025, according to data released by the Central Bank of Brazil (Banco Central do Brasil) on February 19, 2026. The growth, measured by the Economic Activity Index (IBC-Br), indicates a stronger performance than initial forecasts for the year. This expansion was primarily fueled by robust contributions from the agriculture, industry, and services sectors.

The IBC-Br Index: A Key Economic Barometer

The IBC-Br index serves as a crucial indicator of Brazil's economic health, often regarded as a preliminary gauge of the country's Gross Domestic Product (GDP). It aggregates data from the three main sectors of the economy—agriculture, industry, and services—along with production-related taxes. The Central Bank's Monetary Policy Committee (Copom) utilizes the IBC-Br to inform its decisions regarding the basic interest rate, known as the Selic rate. While the official GDP figures are compiled by the Brazilian Institute of Geography and Statistics (IBGE) and are scheduled for release on March 3, the monthly IBC-Br provides a timely snapshot of economic trends.

Sectoral Contributions Fuel Growth

The 2.5% overall growth in 2025 was underpinned by significant increases across key economic sectors:

• Agriculture demonstrated exceptional strength, expanding by 13.1%. This robust performance played a crucial role in cushioning any potential slowdowns in the broader economy.
• The industrial sector also contributed positively, recording a growth of 1.5%.
• The services sector, a major component of the Brazilian economy, saw an increase of 2.1%.

Notably, if the agricultural sector's substantial contribution were excluded, the IBC-Br would have shown a rise of 1.8% for the year.

Economic Context and Monetary Policy

The 2025 economic performance surpassed initial forecasts, which had projected a more modest expansion of around 2.0% at the beginning of the year. Throughout 2025, the Central Bank maintained the benchmark Selic rate at 15%, its highest level in nearly two decades, as part of its strategy to combat inflationary pressures. The official inflation rate (IPCA) for 2025 accumulated to 4.44%, remaining within the target tolerance range. Economic activity concluded 2025 on a softer note, with the IBC-Br registering a seasonally adjusted fall of 0.2% in December compared to November. However, on a non-seasonally adjusted basis, the index increased by 3.1% year-on-year in December. For the fourth quarter of 2025, the index rose by 0.4% from the preceding three months. Policymakers have indicated that an easing cycle for interest rates is expected to commence in March.