Brazil's 2026 Economic Outlook: Stable Inflation Projections and Major Toyota Investment Supported by BNDES
Financial forecasts show stable inflation and growth in Brazil for 2026, while BNDES backs Toyota with R$500 million for technological upgrades and industry modernization.
- • Inflation projection for 2026 raised slightly to 4.06% with stability expected in following years.
- • GDP estimated to grow 1.8% in 2026 and 2027, with 2% growth forecast in 2028.
- • BNDES approved R$500 million credit for Toyota do Brasil to acquire advanced machinery and technology.
- • Toyota's investment focuses on hybrid flex vehicle projects and industry modernization under the BNDES Mais Inovação program.
Key details
On January 5, 2026, Brazil's financial market projected a slight rise in inflation for 2026 to 4.06%, according to the Central Bank's Boletim Focus. This marks a minor increase from the previous forecast of 4.05%, after eight consecutive weeks of decline. Inflation projections for 2027 and 2028 remain steady at 3.8% and 3.5%, respectively. Meanwhile, GDP growth is expected at 1.8% for both 2026 and 2027, increasing slightly to 2% in 2028. The currency exchange rate is projected to hold at around R$5.50 per US dollar through 2027 and rise marginally to R$5.52 in 2028. The Selic interest rate, which concluded 2025 at a high of 15%, is forecast to decrease to 12.25% in 2026, continuing a trend aimed at balancing inflation and economic stimulation.
In parallel with these macroeconomic projections, the National Bank for Economic and Social Development (BNDES) approved a substantial R$500 million credit line to Toyota do Brasil. This funding will support the acquisition of cutting-edge machinery and technology as part of Toyota's hybrid flex vehicle projects in Sorocaba, São Paulo. The investment forms part of the BNDES Mais Inovação program, seeking to modernize Brazilian industry and enhance the national supplier base through Industry 4.0 innovations. BNDES President Aloizio Mercadante emphasized the bank's role in accelerating technological adoption, sustaining supplier development, and raising Brazil's industrial competitiveness.
Toyota's initiative also addresses recovery efforts for its Porto Feliz plant, damaged by severe weather in September 2025. Operating three plants and employing over 7,000 people, Toyota do Brasil continues its pioneering work in hybrid flex vehicle production, underpinning its commitment to sustainable mobility solutions in the country.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.
