Week Ahead in Latin America: Brazil: A steeper growth downtrend for 2027

Research evidence excerpt

Week Ahead in Latin America: Brazil: A steeper growth downtrend for 2027

Idea

July 2, 2026 09:10 AM GMT

Morgan Stanley C.T.V.M. S.A.+MWeek Ahead in Latin America | Latin America Ana Madeira

Economist

Brazil: A steeper growth Ana.Madeira@morganstanley.comThiago A. Machado, CFA +55 11 3048-9582

Thiago.Machado@morganstanley.com +55 11 3048-6249

downtrend for 2027 Fernando D Sedano

Chief LatAm Ex-Brazil Economist

Fernando.Sedano@morganstanley.com +55 11 3048-6605

This week, we focus on Brazil growth prospects arguing that

Morgan Stanley & Co. LLC

near-term drivers should sustain resilience through this year, Nicolas Eterovic

though growth faces mounting downside pressures in 2027. EconomistNicolas.Eterovic@morganstanley.com +1 212 761-1245

Next week focus on BCRP meeting, CPI for Colombia, Chile,

Morgan Stanley C.T.V.M. S.A.+

Mexico and Brazil, and Mexico monetary policy minutes. Julia Lobato Barbosa

Brazil in focus… We argue that near- Exhibit 1: Household indebtedness Julia.Lobato.Barbosa@morganstanley.com +55 11 3048-6016

term growth drivers – income- and credit- to keep rising amid high interest rates

boosting measures paired with a still and pressure down economic activity

resilient labor market – should continue 11% 12%

to sustain an orderly deceleration 10% 8%

9% 4%

throughout this year (we expect GDP 0%

8%

growth at 2.0%); on the other hand, some 7% -4%-8%

signs have started to point at a more 6% -12%

Apr-10 Apr-12 Apr-14 Apr-16 Apr-18 Apr-20 Apr-22 Apr-24 Apr-26

fragile growth outlook for the medium Debt service ratio for hh (interest payments/disp. income)

Economic activity (yoy, 3mma) - RHS

term leading us to revise down our Source: BCB, Morgan Stanley LatAm Economics

growth forecast to 1.2% for 2027 (from

1.6% previously; consensus expectation is at 1.7%).