A New Decade, New Trajectory for the Brazilian Economy?

Brazil wrapped up 2019 with GDP growth estimated to be no more than 1.17 percent—hardly cause for excitement after a decade in which Brazil grew 3.6 times slower than the average for emerging and developing nations—but hopes are higher for 2020. The Brazilian government predicts the economy will grow 2.4 percent this year, encouraged by new economic policies, low inflation and higher consumer confidence, and the passage of pension reform in October 2019.  

This optimism also stems from the government’s ambitious economic agenda for 2020: tax reform, administrative reform to modernize the Brazilian state, and new policies to encourage investment and open trade. Notably, two major, pending initiatives on trade to resolve difficulties within Mercosur and allow the trade bloc to engage in meaningful conversations with the European Union remain uncertain. And the stakes are high. Beyond the obvious economic implications, the political fate of the current administration—whose approval rating has slowly waned—depends heavily on its ability to restore growth and reduce unemployment.

On January 27, 2020 the Brazil Institute hosted a panel featuring experts Mauricio Moura, Christopher Garman, Monica de Bolle, Mauricio Mesquita Moreira, and Amy Erica Smith on the prospects of the Brazilian economy and the political environment in 2020. The discussion covered topics ranging from the public’s changing views on President Jair Bolsonaro, the administration’s proposed economic reforms and Brazil’s structural issues, to free trade, and the economy’s effect on politics.