'Preview' of the Central Bank's GDP records growth of 0.2% in the 2nd quarter

The Central Bank (BC) reported this Monday (17) that the Economic Activity Index (IBC-Br), considered the "preview" of the Gross Domestic Product (GDP), registered % growth in the second quarter of this year. The BC result was calculated after seasonal adjustment — a kind of "compensation" to compare different periods. The comparison was made with the first quarter of 2026. GDP is the sum of all goods and services produced in the country and serves to measure the evolution of the economy. The IBC-Br has a different calculation, with a more restricted set of information (see below in this report). The official result for the second half of this year, measured by the Brazilian Institute of Geography and Statistics (IBGE), will be released on September 1st. ?If GDP grows, it means that the economy is doing well and producing more. If GDP falls, it means the economy is shrinking. ?However, GDP growth does not always equate to social well-being. Election year In an election year, the government has taken actions to stimulate the economy and reduce the population's debt, which boosts demand for products and services. The economic team, for example, zeroed IR taxation for those earning up to R$5,000, in addition to releasing the FGTS and cheaper credit lines for the population. The government's strategy, however, makes it difficult to control inflation. The BC has clearly said that a slowdown, that is, a slower rate of economic growth, is part of the strategy to contain inflationary pressures. ??In the minutes of the last Copom meeting, released last week, the BC reported that the so-called "product gap" remains positive. This means that the economy continues to operate above its growth potential without putting pressure on inflation. Despite the good result of the GDP preview in the first quarter of this year, the financial market believes in a slowdown in the economy in 2026. The market estimates growth of 1.86% in 2026, compared to 2.3% last year. The BC projects an expansion of 1.6% this year. GDP However, the Central Bank's calculation is different from the IBGE calculation. The BC indicator incorporates estimates for agriculture, industry and the services sector, in addition to taxes, but does not consider the demand side (incorporated in the IBGE GDP calculation). The IBC-Br is one of the tools used by the BC to define the country's basic interest rate. With greater economic growth, for example, there would theoretically be more inflationary pressure, which could help to contain the fall in interest rates.