Brazil economy rebounds in first quarter on strong consumption

BRASILIA - Brazil's economy rebounded in the first quarter, expanding 1.1% from the previous three months, official data showed on Friday, slightly ahead of the 1.0% growth expected by economists in a Reuters poll.

Latin America's largest economy gained momentum in the January-March period, supported by household consumption and stronger investment, against a backdrop of a tight labor market and government stimulus.

The pickup follows a weak second half of last year, when growth was 0.3% in the fourth quarter and 0.1% in the third, according to revised figures released by statistics agency IBGE.

Household consumption, the main demand driver, rose 1.0%, boosted by policies under President Luiz Inacio Lula da Silva that increased disposable income - including an expanded income tax exemption for middle-income households.

Gross fixed capital formation, a measure of investment, increased 3.5%, while government consumption expanded by 0.4%.

On the supply side, agriculture posted strong growth, with output rising 2.0% in the quarter, driven by higher soybean production. Industry grew 1.0% led by the extractive sector, while services were up 0.5%.

On an annual basis, Brazil's gross domestic product (GDP) rose 1.8%, matching market forecasts.

(Reporting by Marcela Ayres; Editing by Gabriel Araujo)

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This story was originally published May 29, 2026 at 5:30 AM.