Economic Outlook This Week: Brazil’s Slowing Inflation and China’s Steady Interest Rates

• Brazil’s IPCA-15 Inflation Set to Slow in October
• Brazil’s Current Account Deficit Hits Record High
• Will Consumer Confidence Sustain Its Recovery?
• China’s Central Bank Holds Rates Steady
• China’s GDP Growth Cools Further in Q3
• FAQs: Key Economic Questions Answered

The final week of October 2025 is set to deliver key economic indicators that will reinforce the narrative of a global slowdown, with Brazil’s IPCA-15 inflation data and China’s central bank policy decision taking center stage. Domestically, Brazil’s inflation is expected to decelerate further, while China’s central bank is likely to hold interest rates steady amid slowing GDP growth. Here’s a DEEP dive into what to expect.

Brazil’s IPCA-15 Inflation Set to Slow in October

Brazil’s mid-month inflation index, IPCA-15, is projected to rise by just 0.30% in October, down from September’s 0.48%. The slowdown reflects easing energy prices after the expiration of the Itaipu tariff benefit last month. With electricity costs stabilizing and the tariff flag dropping from "Red Level 2" to "Red Level 1," inflationary pressures are softening. Analysts suggest this trend, combined with declining producer prices and potential fuel price cuts by Petrobras, could help Brazil meet its annual inflation target. The BTCC research team notes that if this disinflation persists, it may open the door for monetary easing in early 2026.

Brazil’s Current Account Deficit Hits Record High

September’s trade surplus shrank to just $2.99 billion, the lowest for the month in historical data, as imports surged due to currency appreciation and domestic demand. The narrowing surplus, alongside growing deficits in services and primary income, is expected to push the current account deficit above $9 billion—a record high. However, foreign direct investment (FDI) remains resilient, exceeding $4 billion in September, up from $3.9 billion in the same period last year. This suggests continued international confidence in Brazil’s economy despite external imbalances.

Will Consumer Confidence Sustain Its Recovery?

After months of decline, Brazil’s consumer confidence rebounded in September to a nine-month high. However, the sustainability of this recovery is uncertain. The improvement was driven mainly by future expectations rather than current conditions, indicating lingering economic pessimism. "This could be a blip rather than a trend," warns a BTCC market strategist. "Until we see consistent gains in both expectation and perception indices, caution is warranted."

China’s Central Bank Holds Rates Steady

As expected, the People’s Bank of China (PBoC) kept its benchmark lending rates unchanged at 3.0% (1-year) and 3.5% (5-year). The decision comes ahead of Q3 GDP data, which is expected to show a slowdown. If growth falls short of Beijing’s 5% target, analysts anticipate rate cuts in the next meeting. "With no inflationary pressures, China has room to ease," says a TradingView analyst. "But they’re waiting for confirmation from the GDP report."

China’s GDP Growth Cools Further in Q3

China’s Q3 GDP, released alongside the PBoC decision, is estimated to grow just 0.8% quarter-on-quarter and 4.7% year-on-year—down from 5.2% in Q2. The slowdown reflects weakening domestic demand and global trade headwinds. Should the figures match expectations, pressure will mount on policymakers to stimulate the economy through monetary or fiscal measures. Historical data from TradingView shows that similar slowdowns in 2020 and 2023 prompted swift policy responses.

FAQs: Key Economic Questions Answered

Why is Brazil’s inflation slowing?

The deceleration is primarily due to lower energy costs and reduced tariff flags, alongside broader disinflationary trends in producer prices.

What does China’s GDP slowdown mean for global markets?

A weaker Chinese economy could dampen commodity demand and affect emerging markets reliant on trade with China, including Brazil.

Will Brazil’s central bank cut rates soon?

Not immediately. While inflation is easing, policymakers will likely wait for clearer signs of sustained disinflation before acting.