Brazil’s Economic Outlook Brightens as Inflation Slows and Tax Reform Gains OECD Praise
Brazil’s stock market hits new peaks amid lowest October inflation in decades and OECD endorses its tax reform to boost competitiveness.
- • Ibovespa reached a record 158,000 points with a 1.80% increase, signaling investor optimism.
- • October inflation slowed to 0.09%, the lowest since 1998, mainly due to a 2.39% drop in electricity prices.
- • The Central Bank’s Copom kept the Selic rate at 15% but softened its stance, raising hopes for future interest rate cuts.
- • OECD praised Brazil’s tax reform featuring a dual IVA system, which aims to simplify taxation and increase competitiveness.
Key details
On November 11, 2025, Brazil’s economic landscape displayed promising signs as investor confidence propelled the Ibovespa index to historic highs, while inflation figures indicated easing pressures. The Ibovespa surged by 1.80%, crossing the 158,000-point mark—peaking at 158,053.74 points—marking three consecutive record highs in less than three hours. According to CNN Brasil (ID 139175), this rally was fueled by optimistic expectations for an interest rate cut following the release of October's inflation data and minutes from the Central Bank's monetary policy meeting.
Data from the Brazilian Institute of Geography and Statistics (IBGE) revealed a significant slowdown in inflation, with the IPCA (broad consumer price index) falling sharply from 0.48% in September to just 0.09% in October—the lowest figure for that month since 1998. The drop largely stemmed from a 2.39% decline in residential electricity prices due to tariff reductions, which negatively impacted the inflation index by -0.10 percentage points. The subdued inflation rate aligns with the Central Bank’s Copom maintaining the Selic rate at 15% but adopting a softer stance on further tightening, contributing to a dip in DI rates suggesting medium to long-term rate cuts are anticipated (ID 139164, 139175).
In parallel developments, the Organisation for Economic Co-operation and Development (OECD) praised Brazil’s ongoing tax reform, highlighting that the new system would bolster the country’s economic competitiveness. The reform introduces a dual value-added tax (IVA) system to replace five existing consumption taxes, with federal and state/municipal components governed by uniform rules to reduce complexity and distortions. The OECD study underscored the necessity for consistent application across Brazil’s 27 states and over 5,500 municipalities to ensure the reform’s success (ID 139173).
Together, these economic indicators and policy reforms signal a more stable and attractive environment for investment in Brazil. The stock market’s record highs, subdued inflation driven by lower utility costs, and a streamlined tax system bolstered by international approval collectively portend a positive trajectory for Brazil’s economy as it looks towards potential monetary easing and sustained growth.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.