Brazil: Economic activity tops expectations for sixth month running in November
Latest reading: Economic activity expanded for a fourth consecutive month in November, rising 0.1% month on month in seasonally adjusted terms, matching October’s 0.1% increase and beating market expectations for the sixth month running.
On an annual basis, economic activity increased 4.1% in November, which was significantly below October’s downwardly revised 7.2% expansion. Still, the trend pointed up, with annual average economic activity growth rising to 3.6% in November (October: +3.4%), which marked an over two-year high.
Looking at sectoral data, services output—which accounts for roughly 70% of GDP—swung into a steeper-than-expected contraction, falling 0.9% month on month in seasonally adjusted terms (October: +1.4% mom s.a.), the worst result since April 2023. Retail sales displayed similar dynamics: They declined 0.4% month on month in November, deteriorating from the 0.4% rise in October, and surprising markets to the downside. Lastly, industrial output declined at a faster pace from the prior month (November: -0.6% mom s.a.; October: -0.2% mom s.a.).
Outlook: Taken together, October and November data—despite being better than expected—suggest that the economy is cooling down on the impact of elevated interest rates. Accordingly, we should see slower sequential GDP growth in the fourth quarter than in the third, a view shared by our panelists.
Overall in 2025, our Consensus is now for GDP growth to slow notably from last year as 2024 GDP growth was better than expected, creating a high base of comparison. Moreover, still-high inflation and elevated interest rates will likely dampen private consumption and fixed investment growth.