High interest should bring slow down to subsequent GDP readings

In the first quarter of 2025, a 1.4% growth in the gross domestic product (GDP) surprised the elasticity of the Brazilian economy, even in the high interest rates scenario, but the next readings would slow down.

Have to have CNNEconomists said that the weight gain of contraction monetary policy in the labor market and the service sector to the low height of economic activity is still a FIRM, according to the recent released data.

“After we have overcome the neutral interest, we will feel the compulsory squeeze at this time. We will see in the weak second quarter and negative quarter,” said Way Investment’s chief Economist Alexander Espirito Santo.

The monetary policy goes into effect for an average of 6 to 9 months – so makes it natural that there is a log in the indicators. In this way, economists say that this moment is migrating to more compulsory economic activities.

“The job is supporting the market use, because Agro is very strong, there is no significant weight in the GDP. Financial support services and consumption are coming from now on. We need to see the reduction in this consumption and getting worse in the job market.”

Espirito Santo estimates the second quarter GDP close to 0.5% and in the last 2025, light withdrawal.

In an interview CNN money.

“The data is still very strong. All are still relatively high temperature. In the early 2025 we already have to take a strong decline as we have already expected,” Salto said.

However, in the eyes of the former secretary of Sao Palo, the path of slowdown is imminent.

“But what is the trend is that this slowdown should take place in May now, because the monetary policy is in control and it will produce credit, consumption and disappointment of investment,” he said.

Inter of the Chief Economist, Rafela Vitaria, is of the opinion that the strength of the agriculture should continue to drag the Brazilian economy in the latter reading, but the effects of monetary policy further emphasize the other indicators.

“The performance of Agro is still contributing to the 2nd quarter, but we hope to slow down demand in investments and family use,” he said.

“It is important to slow down the demand at this time to reduce interest and will resume supply growth along with Agro.”