OECD economic surveys : Brazil 2018

Author / Creator

Organisation for Economic Co-operation and Development

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Online

Summary

Strong growth and remarkable social progress over the past two decades have made Brazil one of the world's leading economies, despite the deep recession that the economy is now emerging from. Howev...

Strong growth and remarkable social progress over the past two decades have made Brazil one of the world's leading economies, despite the deep recession that the economy is now emerging from. However, inequality remains high and fi scal accounts have deteriorated substantially, calling for wide-ranging reforms to sustain progress on inclusive growth. A better focus of social expenditures towards the poor would reduce inequality and ensure sustainability of public debt at the same time. This will require diffi cult political choices, particularly in pensions and social transfers. Reducing economic transfers to the corporate sector, in conjunction with more systematic evaluations of public expenditure programmes, will strengthen growth, improve economic governance and limit the future scope for rent seeking and political kick-backs. Maintaining the growth potential of the economy requires stronger investment, which could also raise productivity and concomitantly, the scope for future wage increases. Simplifying taxes, reducing administrative burdens and streamlining licensing would raise investment returns, while stronger competition could generate new investment opportunities in thriving, high-performing enterprises. At the same time, trade barriers shield enterprises from global opportunities and foreign competition. Fostering a stronger integration into global trade would allow fi rms to become more competitive and generate new export opportunities.

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