The Brazilian Association of Companies of Components for Leather, Footwear and Artifacts (Assintecal) held its second Intelligence Group meeting of 2025 on the morning of the 8th. In an online format, Dr. Marcos Lélis, an economist and sectoral consultant, discussed the impact of international instabilities on the Brazilian economy and the national footwear sector.

According to Lélis, the tariff war between the United States and China has distinct effects on the international financial market. The first effect is a recession in the North American economy, with rising interest rates, and Chinese exporters seeking alternative markets. The economist emphasizes that the impact on the Brazilian footwear chain mainly comes from China, which has been offloading its production in markets important to Brazil, also affecting national exports. “The direct impact on the Brazilian market is the lack of prospect for our interest rates to decrease in the coming months, as both the US and Brazilian rates are linked to prevent the devaluation of the Real,” he explains, noting that on the 7th, the Central Bank had already adjusted the Selic rate to 14.75% per year, the highest rate since 2016.

Brazil

In Brazil, the recent appreciation of the national currency against the dollar impacts inflation, as it affects gasoline and food prices. According to Lélis, even with inflation above the target (3%), currently at 5.5%, there is no prospect of an increase throughout the year. Brazilian economic activity, which grew 3.8% cumulatively in 2025, is another positive indicator. “The Focus bulletin has not been changing projections, and we continue with a GDP growth projection of 2% in 2025 and 1.2% in 2026,” he says.

On the other hand, a hindrance to increased consumption in the domestic market continues to be high household debt, currently at 77%, according to a survey by the National Confederation of Commerce of Goods, Services and Tourism (CNC). “In 2015, this index was 20%. So, indebtedness continues to be a hindrance to greater consumption in Brazil,” he points out.

Sectoral Analysis

According to Lélis, the production of the national footwear industry grew by 0.8% in the first quarter compared to the same period last year. Although positive, the performance is well below the national average growth of about 3% in the same interval. “This raises a yellow flag in the sector,” he highlights. For the year, the projection remains positive, but it may be affected by international instabilities in footwear exports, which saw a 14% increase in pairs in the first quarter.

Group

Coordinated by Lélis, Assintecal’s sectoral 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. For more information, please contact: relacionamento@assintecal.org.br.