High interest rates at the Selic benchmark of 13.75% continue to constrain domestic demand, with the central bank’s Focus survey and private forecasts revising 2026 GDP growth down to 1.6–1.9% amid weak industry and services activity. Q2 2026 expanded 0.5% quarter-on-quarter, but August monthly indicators and IPEA projections point to near-flat or slightly positive Q3 performance around 0.1%, consistent with the market-implied concentration on mild contraction or flat outcomes. Persistent inflation near 4.6% year-over-year, elevated real rates, and post-election fiscal uncertainty have reinforced expectations of subdued third-quarter momentum ahead of the December 2 official release.