Secretariat of Economic Policy says that conflict between the United States and Iran has put pressure on fuel and food prices in Brazil
The SPE (Economic Policy Secretariat of the Ministry of Finance) estimates the IPCA (Broad Consumer Price Index) for 2026 because of the rise in oil prices caused by the conflict between the United States and Iran. The review was presented this Monday (May 18, 2026) in the SPE Macrofiscal Bulletin. Here is it (PDF – 824 kB).
The government maintained its GDP growth projection at 2.3%, despite the worsening external scenario and the expectation of high interest rates for longer.
The Secretary of Economic Policy, Débora Freire, and the Undersecretary of the SPE, Rafael Leão, gave statements during the presentation of the report in Brasília.
According to the economic team, the closure of the Strait of Hormuz raised the international price of oil, interrupted the cycle of falling interest rates in advanced economies and increased global inflationary pressure. The energy shock affects fuel, food, exchange rates and the conduct of Brazilian monetary policy.
The bulletin establishes that the average price of a Brent barrel for 2026 rose from US$73.1 in March to US$91.2 in May, an increase of close to 25%. At the same time, the expectation for the terminal Selic rate increased from 12% to 13% per year.
According to Rafael Leão, the oil shock became the main vector of pressure on Brazilian inflation. The IPCA accumulated over 12 months increased from 3.8% in February to 4.4% in April. Monitored prices went from 4.4% to 6.1%, driven mainly by gasoline.
Food also started to put pressure on the index. The government identified an increase in meat, milk, rice and fresh products. The SPE stated that part of the movement arises from supply shocks and the livestock cycle.
Despite the inflationary review, the SPE maintained its GDP growth projection of 2.3% for 2026. The government expects a slowdown in activity in the 2nd and 3rd quarters, with a recovery at the end of the year driven by the manufacturing industry.
The report also points out that the Brazilian economy continues to be supported by the resilient job market. The unemployment rate was 6.1% in the quarter ended in March, the lowest level in the historical series for the period.
The SPE also stated that the government adopted fiscal measures to reduce part of the effects of the international oil price rise. Among them are diesel subsidies, temporary reduction of PIS/Cofins and financing lines for companies. The monthly impact of the actions was estimated at R$6.2 billion.
