Brazil Industrial Production Falls 0.6% in August

Overview

• The IBGE reported on Friday that seasonally adjusted industrial output fell 0.6% in August versus July and declined 1.2% from August 2025.
• The drop was broad based with 16 of 25 industrial branches and all four main economic categories posting month-on-month falls.
• Largest negative sector moves included tobacco production down 23.4%, pharmochemical and pharmaceutical products down 5.5%, and a fall in extractive industries.
• Food products were the main positive offset with a 1.0% increase, while cumulative gains remain small at 0.8% year-to-date and 0.6% over the last 12 months.
• Economists point to the 13.75% Selic rate and a recent tobacco IPI increase as key forces squeezing domestic demand and investment, which could weaken third-quarter GDP and business investment further.