What lies ahead
The slowdown of the economy in 2025, reflected in growth around 2.3% for this year versus 3.4% last year, should continue in 2026. In our central scenario, output expansion next year should be around 1.8%, still reflecting the effect of higher interest rates on domestic demand.
Indeed, the combination of household consumption, government consumption and gross fixed capital formation, which was growing at a pace close to 5% at the end of last year, has already slowed to 2.6% in the four-quarter period ended in September, reflecting mainly household consumption, which fell from 5.1% to just 2.1% over the same interval.
Despite the change in the schedule for court-ordered payment disbursements this year compared to 2024 (in the second half of 2025), we understand that this outcome stems from the sharp increase in the real interest rate starting in the third quarter of 2024. The one-year real interest rate, more sensitive to monetary policy, which hovered around 6% per year from January to September 2024, reached 9% per year in the same period of 2025, peaking above 10% per year between June and August.
The increase in banks’ funding costs and, therefore, in credit costs more broadly, led to a reduction in credit granting to individuals (and companies) from the beginning of the year.
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