That’s the view of Marcos Lélis, a PhD in economics and consultant for the footwear production chain. He shared his perspective with industry business owners at the Intelligence Group meeting of the Brazilian Association of Companies of Components for Leather, Footwear and Artifacts (Assintecal). The event took place online on the morning of August 28.

According to Lélis, the Brazilian economy is “treading water,” with zero growth from July compared to the previous month, according to the IBC-Br. “We are entering a period of adjustments, with low economic activity. It’s in this exact context that the strongest impacts of the US tariff hike are expected to appear, which is a concern,” he commented. The result can already be seen in the Focus projections for Brazilian Gross Domestic Product (GDP) growth. For 2025, there was a downward adjustment, with a projected increase of 2.18%. For 2026, GDP growth is expected to be 1.86%. “For 2025, with the effects of the tariff hike, which should be stronger in the coming months, we should end up with 1.9% growth. In other words, the tariff hike will cause us to lose 0.3% of our GDP,” he projected.

According to Lélis, two other obstacles to Brazilian economic activity have been the high interest rates and the resulting higher debt burden on family income. “Today, the commitment of family income to paying interest is at 35%,” the economist emphasized.

The labor market, although still hot, seems to have entered a phase of adjustments. According to Lélis, with unemployment stable at 5.8%, the market has already begun to see an increase in the informality rate or “underemployment.” Average earnings have also entered a phase of deceleration, having grown 3.2% in the April/May/June quarter, two percentage points less than the increase recorded in the same period last year.

Footwear

The effect of the cooling Brazilian economy, according to Lélis, will be felt in the Brazilian footwear sector. “We haven’t yet changed the projections made in conjunction with the Brazilian Footwear Industries Association (Abicalçados), but we should see growth closer to the pessimistic end of the spectrum, with 1.4% in production and 1.2% in sector exports,” he concluded.

Group

Coordinated by Lélis, the Assintecal Market Intelligence group meets every two months to provide updated figures and projections based on the national and international market outlook. The meeting is open to Assintecal members. More information is available via email at relacionamento@assintecal.org.br.