Published Wednesday, 28 October, 4:46 p.m. ET · Source: CNI, Brazil’s national industry confederation
Brazil’s factories are running out of breath, and the country’s biggest industry group has now put a number on it. On Wednesday 28 October the CNI, the National Confederation of Industry that speaks for Brazilian manufacturers, cut its 2026 growth forecast for Brazil’s economy from 2% to 1.6%.
The culprit is the central bank’s high interest rate, which makes loans costly for companies and families. The benchmark Selic rate, which stands at 13.75%, is still biting even after several cuts this year.
Key Facts
- The forecast. The CNI cut its 2026 growth forecast to 1.6% from 2%, citing weaker factories and services.
- The pain. Manufacturing is now seen shrinking 0.7%, against the 0.6% growth the CNI forecast in July.
- The bright spots. Farming is seen growing 2.5% and mining and oil 9.1%, neither depending much on local demand.
- What is next. The central bank decides on interest rates on Wednesday 4 November at 4:30 p.m. ET.
- Prediction markets. Polymarket, a US prediction market, gives 69.8% to no rate change in November and 26.0% to a quarter-point cut (28 October, 4:41 p.m. ET).
- Power Index Brazil ranks 1st of 14 in The Rio Times Latin America Power Index, with 75.0 points (October 2026 edition).
In Plain English
The CNI is the main lobby for Brazilian industry, so its forecasts reflect what factory owners feel. The Selic is the central bank’s benchmark interest rate, the IPCA is the official consumer price index, and the Copom is the committee that sets the Selic.
Why High Interest Rates Hurt Factories
Mario Sergio Telles, the CNI’s director of industrial development, drew a clear line through the economy. “Whoever depends more on the domestic market is being hit hard by the interest rate,” he said.
Manufacturers face weak local demand, costly credit and a surge of imports. The CNI now expects the sector to shrink 0.7% this year, a swing from the 0.6% growth it forecast in July.
Industry as a whole is forecast to grow 1.3%, down from 2%, the biggest cut of any sector. Extractive industry, which means mining and oil, will grow 9.1%, but that cannot cover the gap.
Farms Hold Up While Shops and Services Slow
Agriculture is the only major sector whose forecast rose, from 1.8% to 2.5%, on a better outlook for the second corn harvest. Services were cut from 1.9% to 1.6%.
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
-2.43%
171,434.48
-2.43%
69,711.87
+0.35%
10,677.88
-0.83%
2,848,945
—
2,505.79
-0.03%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 171,434.48 | -2.43% | +19.56% | 175,710.05 | 178,526 | 175,157 | — |
| USD/BRL | 5.34 | -1.32% | -0.84% | 5.42 | 5.42 | 5.30 | — |
| SELIC | 13.75% | — | — | — | — | — | |
| PETR4 | 53.31 | -1.06% | +77.70% | 53.88 | 53.70 | 52.83 | 43,239,500 |
| VALE3 | 62.88 | -2.33% | +1.98% | 64.38 | 64.43 | 62.80 | 24,652,300 |
| ITUB4 | 41.42 | -0.67% | +11.30% | 41.70 | 42.60 | 41.15 | 28,160,700 |
| BBDC4 | 15.69 | -1.63% | -13.88% | 15.95 | 16.30 | 15.67 | 65,766,400 |
| BBAS3 | 17.59 | +0.69% | -15.59% | 17.47 | 18.31 | 17.51 | 67,844,600 |
| B3SA3 | 15.27 | +1.33% | +21.71% | 15.07 | 15.78 | 15.20 | 75,282,000 |
| ABEV3 | 15.40 | +0.20% | +26.75% | 15.37 | 15.68 | 15.31 | 27,307,400 |
| WEGE3 | 45.78 | +2.81% | +10.06% | 44.53 | 47.08 | 45.06 | 9,823,200 |
| PRIO3 | 69.21 | -2.71% | +87.14% | 71.14 | 70.98 | 69.15 | 6,663,200 |
| SUZB3 | 47.14 | -0.55% | -3.79% | 47.40 | 47.84 | 46.10 | 7,151,800 |
| RENT3 | 31.14 | -1.67% | -20.73% | 31.67 | 32.68 | 31.02 | 19,092,400 |
| AZZA3 | 16.72 | +1.15% | -42.24% | 16.53 | 17.42 | 16.72 | 4,875,400 |
| CSNA3 | 4.76 | -4.99% | -47.09% | 5.01 | 5.14 | 4.76 | 14,327,900 |
| GGBR4 | 24.87 | -2.28% | +36.28% | 25.45 | 26.20 | 24.79 | 7,507,900 |
| ENEV3 | 26.79 | +0.45% | +49.78% | 26.67 | 27.35 | 26.30 | 12,263,000 |
Jobs, Prices and the Rate Decision
The CNI sees employment rising 1.2% this year. It expects unemployment to ease from 5.3% to 5.0% by December.
Prices are the worry. The CNI expects inflation, measured by the IPCA, to reach 5.15% in 2026.
On rates, the CNI forecasts a quarter-point cut at each of the two remaining Copom meetings, ending 2026 at 13.25%. Traders disagree: our report explains why the bank may pause its rate cuts, and the Selic guide covers the stakes.
What Prediction Markets Say
- Polymarket, “Bank of Brazil decision in November?”: no change 69.8%, 25 basis point cut 26.0%, 25 basis point rise 1.7% (US$116,139 traded).
Prices as of 4:41 p.m. ET, 28 October 2026. Prices are bets, not polls; Kalshi is regulated in the US by the CFTC.
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.
Public Accounts and Trade
The CNI projects a primary deficit of R$54.6 billion (about US$10.2 billion) for the federal government, or 0.4% of GDP, the total output of the economy. The primary balance is the budget gap before interest payments.
Gross public debt is expected to climb from 78.6% to 83.7% of GDP by year-end.Trade is the bright side.The CNI expects a surplus of US$77.3 billion, almost 30% above last year, with exports of US$386.7 billion (up 10.3%) and imports of US$309.4 billion (up 6.4%).Conversions use USD/BRL at 5.35 (RT, 28 October).
What It Means for US Readers
Companies that sell to Brazilian households look more exposed to high rates, while exporters of crops and minerals look sturdier.The CNI is a lobby with its own interests, and its view is not official policy.The IMF, the global lender, still projects 2.2% growth for Brazil in 2026.See also how big Brazil’s economy is and the wider Brazil coverage.
What Is Not Known
Nobody yet knows whether the central bank will cut on 4 November. IBGE, the national statistics agency, publishes third-quarter GDP on Wednesday 2 December, the next hard test of the CNI’s call.
Sources
CNI, Informe Conjuntural 3rd quarter 2026 · Banco Central do Brasil, Copom · IMF, World Economic Outlook · IBGE release calendar
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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Frequently Asked Questions
What is the new CNI growth forecast for Brazil in 2026?
The CNI now expects Brazil’s economy to grow 1.6% in 2026, down from 2%. It blames weaker manufacturing and services.
Will Brazil’s central bank cut interest rates again?
The CNI expects two quarter-point cuts, taking the Selic to 13.25% by December. Polymarket traders put 69.8% on no change at the 4 November meeting.