According to data released on Tuesday by the Brazilian Institute of Geography and Statistics (IBGE), Brazil’s economy recorded minimal growth in the fourth quarter but ended 2025 with solid annual expansion, as extractive industries and agriculture offset a decline in domestic consumption.
The IBGE reported that GDP grew 1.8% compared with the same period a year earlier and 0.1% compared with the previous quarter.
According to the statistics office, GDP increased by 2.3% for the full year, reaching 12.7 trillion reais ($12.7 trillion at current prices).
The quarterly result was in line with market expectations. A Reuters survey had forecast annual growth of 1.8% and quarterly growth of 0.1%.
Slowdown in the second half
The fourth-quarter data confirm a loss of momentum in the second half of the year.
The economy stagnated in the third quarter after growing 1.5% in the first quarter and 0.3% in the second.
The IBGE revised its third-quarter growth estimate of 0.1% to reflect flat performance.
Despite the slowdown, the economy recorded moderate annual growth and avoided contraction.
GDP per capita increased by 1.9% from 2024 to 59,687.49 reais in 2025.
According to Rebeca Palis, the IBGE’s coordinator of national accounts, agriculture, extractive industries, information and communication, and other service activities accounted for 72% of overall value added growth in 2025.
Palis said that Brazil’s contractionary monetary policy, which weighed more heavily on interest rate-sensitive sectors, had less impact on these industries.
Growth is driven by agriculture
With an 11.7% annual growth, agriculture was the best-performing sector in 2025.
Higher production and productivity advances in important crops, especially maize (up 23.6%) and soybeans (up 14.6%), were the main causes of the increase, according to the IBGE.
In 2025, both hit all-time highs. The performance of the industry was also enhanced by livestock farming.
Oil and gas extraction was the primary driver of the industry’s 1.4% overall growth.
In 2025, Extractive Industries’ added value rose by 8.6% as a result of increasing production in the energy sector.
Additionally, construction saw a slight 0.5% increase throughout the course of the year.
But not every industrial sector did well. Activities related to electricity and gas, water, sewage, and waste management shrank by 0.4%, and Manufacturing Industries decreased by 0.2%, concluding the year in negative territory.
Services continue to be robust
Brazil’s economy is largely driven by the services sector, which grew 1.8% in 2025 across all major activities.
Financial and insurance services increased by 2.9%, while information and communication rose by 6.5%.
Real estate activities and other services each grew by 2.0%, and transportation, storage, and postal services expanded by 2.1%.
Public administration, defence, health, and education recorded growth of 0.5%.
According to the IBGE, improvements in the labour market, greater credit availability, and government income transfer programs contributed to a 1.3% increase in household consumption compared with 2024.
However, this marked a significant slowdown from the 5.1% growth recorded in 2024, reflecting the negative effects of tighter monetary policy.
Government consumption increased by 2.1% in 2025.
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