Brazil flag Brazil: Economic and Political Overview

The economic context of Brazil

Economic Indicators

Brazil is the world's ninth-largest economy. The country is still working on rebuilding itself after the recession that happened nine years ago when the economy contracted by almost 7%. Since then, Brazil hasn’t been able to grow at the same pace it was used to during the decade before the recession hit. Nevertheless, the Brazilian economy has been experiencing a slow but steady recovery in recent years. After growing by 2.9% in 2022, the first half of 2023 saw a robust recovery in economic activity, driven by an exceptional agricultural harvest and resilient household spending. Consumer spending continued to remain strong in the second half, bolstered by a robust labour market, while investment has declined, indicating a heightened sensitivity to the high-interest rate environment. For the year as a whole, the IMF estimated growth at 3.1%. As agricultural exports will have a lower impact in the years to come, GDP growth is expected to decelerate to 1.5% this year and 1.9% in 2025.

In 2023, Brazil experienced a significant decline in its fiscal position due to slow revenue growth, substantial expenditure hikes primarily linked to the expansion of Bolsa Familia social benefits, and the resolution of outstanding court-ordered "precatorio" payments. Fitch projected that the central government's primary balance deteriorated to a 2.2% GDP deficit from a 0.5% surplus in 2022. The broader general government primary balance also worsened to a 2% deficit in 2023 from a 1.2% surplus in 2022 due to a shrinking primary surplus among subnational governments. This, combined with a somewhat larger interest bill, elevated the overall deficit to around 8%. The 2024 budget aims for a federal primary balance of 0% of GDP. However, achieving this goal seems increasingly difficult given the uncertainties surrounding revenues and spending. The government debt-to-GDP ratio has resumed an upward path in 2023, reaching 88.1% from 85.3% one year earlier (IMF), which should continue over the forecast horizon, with debt standing at around 92.4% of GDP by 2025. Inflation declined markedly over 2023, averaging 4.5%, allowing the central bank to ease monetary policy, reducing the policy rate from 13.75% in July to 12.25% by November 2023.

The labour market has shown signs of improvement, with the unemployment rate dropping to 7.7% in September 2023, the lowest level recorded since June 2015. Job growth was primarily driven by the services sector, particularly domestic services. However, the government believes that the real figures are significantly higher, as it is estimated that almost two-fifths of the country's employed workforce, have informal jobs. The IMF expects the unemployment rate to remain stable this year and the next. Overall, the country continues to face social issues and has one of the highest levels of inequality in the world, with high disparities between the country's regions. Even though Brazil has lifted 28 million people out of poverty in the last 15 years, 10% of the population still lives in poverty, while the country's richest 5% have the same income as the remaining 95% of the population.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 1,951.852,173.672,331.392,437.912,596.12
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 9,61210,64211,35211,80912,510
General Government Balance (in % of GDP) -6.3-8.0-7.2-5.7-5.4
General Government Gross Debt (in % of GDP) 83.984.786.789.390.9
Inflation Rate (%)
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -48.25-28.62-31.90-35.74-44.72
Current Account (in % of GDP) -2.5-1.3-1.4-1.5-1.7

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

Brazil has abundant natural resources and a relatively diversified economy. The country is the world's largest producer of coffee, sugar cane and oranges, and is one of the world’s largest producers of soya. With forests covering half of the country and the world’s largest rainforest, Brazil is the world’s fourth-largest exporter of timber. Additionally, Brazil is home to the world’s largest commercial livestock heard. The country also attracts many multi-national groups in the food and bio-fuels industries. Still, even though agriculture represents around 40% of exports, it contributes relatively little to the GDP (6.8%) and only employs 10% of the population. According to FAO, the 2023 maize crop production was officially estimated at a record high of 102 million tonnes, more than 40% above the previous five-year average, while for wheat it was forecast at 10.8 million tonnes, near the 2022 record level.

Brazil is also a large industrial power and has benefited greatly from its mineral ore wealth. The country is the world’s second-largest exporter of iron and one of the world’s main producers of aluminium and coal. As an oil producer, Brazil is aiming to become energy independent in the near future, with reserves that could make it one of the top five oil producers in the world. Furthermore, the country is increasingly asserting itself in the textile, aeronautics, pharmaceutical, automobile, steel and chemical industry sectors. Many of the world’s large automobile manufacturers have set up production plants in Brazil. Overall, the industry sector contributes 20.7% to the GDP and employs 21% of the population. According to the Brazilian Institute of Geography and Statistics, industrial production increased by only 0.3% in 2023, with the sectors affected by credit availability – namely automotive, IT, electronics, and machinery – recording worse performances.

The service sector represents 58.9% of Brazilian GDP and employs 70% of the active workforce. In recent years, the country has embarked on the production of high added-value services, especially in the fields of aeronautics and telecommunications. Tourism has also been on the rise in recent years, making it an important segment of the sector. Even though the services sector was hit the hardest during the pandemic, it showed a significant recovery in 2022, with growth reaching pre-pandemic levels. The sector's recovery was mainly driven by services to families, information and communication, and transport, as well as a gentle bounce of the tourism industry.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 9.7 20.6 69.7
Value Added (in % of GDP) 6.8 20.7 58.9
Value Added (Annual % Change) -1.7 1.6 4.2

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

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Regional Rank:


Business environment ranking


The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

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Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025


Country Risk

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Sources of General Economic Information

Official list of ministries and their links
Ministry of Agriculture, Livestock and Supply (MAPA)
Ministry of Infrastructure
Ministry of Foreign Relations (MRE)
Statistical Office
Brazilian Institute of Geography and Statistics (IBGE)
Central Bank
Brazilian Central Bank
Stock Exchange
São Paulo Stock Exchange
Economic Portals
Economic Portal- Brazil

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Latest Update: June 2024