On a year-over-year basis, growth came in at 2%. Momentum did ease versus the first quarter's 1.1% advance, and the rate over the past four quarters slipped to 1.9% from 2.0%.
High borrowing costs remain a headwind with the benchmark Selic still at 14%. That sets the backdrop for October's vote, where keeping activity humming is a central political challenge.
Not everything slowed. Agriculture led the way, jumping 2.8% quarter over quarter, and both services and industry posted modest gains.
The interest-sensitive parts of the economy showed the strain. Construction and manufacturing contracted, household consumption fell 0.4%, and while fixed investment rose 1.2%, it increased far more slowly than in the prior quarter. Andrés Abadía of Pantheon Macroeconomics noted that the expansion is increasingly driven by agriculture and extractive industries, whereas activity in areas most exposed to interest rates is fading.
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President Luiz Inácio Lula da Silva, running for a fourth term, has stepped up fiscal support ahead of October. That push contributed to a 0.4% rise in government consumption, helped shield households from energy costs linked to the conflict in the Middle East, and improved his reelection odds. The tradeoff is hotter inflation pressure, which undermines some of the bite of tight monetary policy and has investors worried that public finances could deteriorate if he wins.
Recent polling shows Lula with an advantage over his main challenger, Flávio Bolsonaro, though the gap has narrowed. With financial conditions tight and signs that activity is cooling, including a softer labor market, growth could slow further after the election.
This is a tale of two economies: farms and mines pulling their weight while credit-heavy sectors hit the brakes. If that mix persists, anything tied to consumer demand or borrowing may feel the squeeze, while areas linked to commodities and public spending hold steadier. Keep an eye on rates, inflation, and post-election policy signals - they will set the tone for how broad or narrow Brazil's growth feels on the ground.