Bradesco and XP Cut Brazil’s 2027 Growth

Brazil is heading into 2027 with its foot on the brake and prices still climbing, two big financial groups warned on Friday. On 6 November, Bradesco, one of Brazil’s largest private banks and a New York-listed ADR (a share certificate that trades in US dollars), and XP, a Brazilian investment platform and broker, both cut their 2027 growth forecasts to below 0.5%, measured by gross domestic product (GDP, the output of the whole economy).

That matters in the United States because American holders of Bradesco ADRs and Brazil funds, exporters selling into Brazil and anyone watching the real, Brazil’s currency, depend on growth and interest rates. Both also raised their 2027 inflation forecasts, to 5.3% (Bradesco) and 5.5% (XP), on the IPCA, Brazil’s official consumer price index.

What Each Bank Changed

The revisions are large, and they point the same way. Growth and inflation both move in the less comfortable direction.

Bradesco expects the Selic, the central bank’s benchmark interest rate, to stay at 13.75% through the first half of 2027. It then sees four cuts of 0.25 percentage points in the second half, taking the rate to 12.75% by the end of 2027.

XP is more cautious and expects the Selic to stay at 13.75% through all of 2027. Both put gross general government debt, the total owed by all levels of government, between 88.0% and 88.7% of GDP at end-2027.

Why They Are More Pessimistic

Bradesco says tighter financial conditions, lower confidence and slowing credit should deepen the loss of momentum over coming quarters. XP points to additional tightening of financial conditions, high indebtedness of companies and households and less fiscal stimulus.

Bradesco says the fiscal framework, the set of rules that limit government spending, needs strengthening to anchor expectations. Its inflation call also leans on a weaker real, Brazil’s currency.

XP names partial materialisation of risks tied to the change in working hours, persistently high oil prices, a weaker real and implementation of the tax reform. The revisions follow the re-election of President Luiz Inácio Lula da Silva on 25 October 2026.

Itaú, another large Brazilian bank, had already forecast 0.5% growth and 6.1% inflation for 2027 on 30 October 2026. Earlier coverage: how Itaú cut next-year growth and economists’ 2027 inflation outlook.

What Prediction Markets Say

Polymarket, a real-money prediction market where users bet on outcomes, prices no change in Brazil’s central-bank rate at the December meeting at about 89%. About US$64,431 had been traded on that bet as of 4:02 a.m. ET on 8 November 2026.

A price of about 89% means bettors see a hold as very likely, consistent with both banks’ view of the Selic. These are bets, not polls.

Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.

What It Means for You

For US holders of Bradesco ADRs, the bank itself expects slowing credit, which bears on what a bank earns. That is a risk to weigh, not a forecast.

For funds holding Brazilian bonds, a Selic at 13.75% keeps local yields high, while the weaker real both banks cite can eat into dollar returns. Slower growth may also weigh on company earnings at home.

For US travellers, a weaker real stretches the dollar further in Brazil. For US exporters, it makes their goods dearer for Brazilians.

What Is Not Known

We could not source the banks’ exchange-rate and unemployment paths exactly, so we do not quote them. The full reports were not reachable, so the figures come from the banks’ published projections as summarised on the day.

It is not yet known whether other banks will follow Bradesco and XP. As of 6 November, Lula had not yet announced his economic team or the fiscal plan for his new term.

What to Watch

Three releases will test the banks’ view. On Monday 9 November, Brazil’s central bank publishes its weekly Focus survey of market forecasts.

On Tuesday 10 November, the central bank is due to release the minutes of its last rate meeting. IBGE, Brazil’s statistics office, is due to publish October inflation data on Thursday 12 November.

Each can confirm or challenge the call for higher prices and slower growth. More on the economy is on our Brazil country page.

Frequently Asked Questions

How much did Bradesco and XP cut Brazil’s 2027 growth forecast?

Bradesco cut it to 0.4% from 1.0%, and XP cut it to 0.3% from 1.0%. Both published the revisions on Friday 6 November 2026.

What do the banks expect for Brazil’s interest rate?

XP expects the Selic at 13.75% through all of 2027. Bradesco expects 13.75% through the first half, then four cuts of 0.25 points to 12.75% by end-2027.

Why does it matter to US investors?

US holders of Bradesco ADRs or Brazil funds face slower growth, higher inflation and high rates for longer in both forecasts. Itaú had already forecast 0.5% growth and 6.1% inflation for 2027.