Brazil: Economic and Political Overview
In this page: Economic Outline | Political Outline | COVID-19 Country Response
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Brazil is the world's thirteenth largest economy. The country is still working on rebuilding itself after the recession that happened eight 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. However, the Brazilian economy has been experiencing a slow but steady recovery in recent years. In 2022, GDP grew by an estimated 2.8%, mainly driven household consumption, private investment, and exports. South America's largest economy is expected to grow at a slower pace in the coming years, with the IMF predicting a GDP growth of 1% in 2023 and 1.9% in 2024.
In 2022, inflation rate reached an estimated 9.4%, surpassing the Central Bank's target of 3.5% and its tolerance band of 5% - and salaries haven't followed. However, inflation is expected to decrease to 4.7% in 2023 and 3.9% in 2024. The relatively high inflation rate and tighter credit conditions weakened household consumption in 2022. However, the Brazilian government claims the worst for the economy is already behind. In 2022, government debt decreased to 88.2%, and is expected to remain stable over the next two years at 88.9% in 2023 and 90.6% in 2024. The government budget balance registered a deficit of 6.5% in 2022, a rate which is expected to slightly increase to 7.5% in 2023, before decreasing to 6.8% in 2024. Although the pandemic has significantly impacted the Brazilian economy, the country has been recovering, following the implementation of the government measures to counteract the resulting economic crisis. Overall, Brazil's counter-cyclical packages in light of the pandemic have been effective in boosting economic activity, which has been gradually recovering.
The unemployment rate in Brazil decreased in 2022, reaching an expected 9.8%, as the country recovered from the impacts of the pandemic. However, the government believes that the real figures are significantly higher, as an official unemployment survey shows that around 32 million people are under-utilised - meaning that they are either not working or working less than they could. Additionally, even those who are employed, often have informal jobs. In fact, the government estimates that 39.3 million people, or 41.6% of the country's employed work force, have informal jobs. The IMF expects that the unemployment rate will slightly decrease to 9.5% in 2023 and remain stable in 2024, especially as the services sector continues to recover from the aftermath of the pandemic and household consumption increases as inflation reduces. Furthermore, 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 live in poverty, while the country's richest 5% have the same income as the remaining 95% of the population.
| Main Indicators | 2022 | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) |
|---|---|---|---|---|---|
| GDP (billions USD) | 1,920.02 | 2,126.81 | 2,265.12 | 2,362.16 | 2,476.63 |
| GDP (Constant Prices, Annual % Change) | 2.9 | 3.1 | 1.5 | 1.9 | 1.9 |
| GDP per Capita (USD) | 9,455 | 10,413 | 11,029 | 11,442 | 11,934 |
| General Government Balance (in % of GDP) | -6.3 | -8.2 | -6.2 | -5.4 | -4.9 |
| General Government Gross Debt (in % of GDP) | 85.3 | 88.1 | 90.3 | 92.4 | 93.9 |
| Inflation Rate (%) | n/a | 4.7 | 4.5 | 3.0 | 3.0 |
| Unemployment Rate (% of the Labour Force) | 9.3 | 8.3 | 8.2 | 8.1 | 8.1 |
| Current Account (billions USD) | -53.62 | -40.60 | -40.77 | -45.35 | -50.28 |
| Current Account (in % of GDP) | -2.8 | -1.9 | -1.8 | -1.9 | -2.0 |
Source: IMF – World Economic Outlook Database, Latest data available.
Note : (E) Estimated data
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 rain forest, 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 40.1% of exports, it contributes relatively little to the GDP (6.9%) and only employs 9.1% of the population. Moreover, in 2022, the country was hit by a drought that impacted the harvests of major crops, especially corn, soya, and sugar.
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. The industry sector contributes 18.9% to the GDP and employs 20% of the population. According to the Brazilian Institute of Geography and Statistics (IBGE), the country's industrial sector has been recovering from the impacts of the pandemic, but production is still below pre-covid levels. While some industries, such as those of capital goods and durable goods, grew in 2022, the industrial sector as a whole was still impacted by tighter monetary policies and high interest rates.
The service sector represents 59.4% of Brazilian GDP and employs 70.9% 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 data available.
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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.
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.
Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025
See the country risk analysis provided by Coface.
The main parties by number of seats in Congress are:
- Social Liberal Party (PSL): far-right, conservative, nationalist, militarist, liberal, anti-communism, anti-feminism, anti-LGBTQI+, populist.
- The Worker's Party (PT): centre-left, social democratic. Party with the highest number of elected representatives throughout the country since 2003.
- The Liberal Party (PL): formerly known as the Party of the Republic (PR). Centre-right to right, liberal, conservative, Christian democracy.
- The Progressive Party (PP): right-wing, nationalist, conservative.
- Social Democratic Party (PSD): big-tent party, centrist, liberal, Christian democracy.
- The Democratic Movement Party (MDB): big-tent party, centrist, liberal, conservative.
- The Brazilian Social Democracy Party (PSDB): centre, social-democratic, liberal, conservative.
- The Brazilian Socialist Party (PSB): centre-left to left-wing, social-democratic, economic nationalism, state interventionism.
- Republicans: right-wing, conservative, Christian democracy.
- The Democrats (DEM): centre-right to right-wing, conservative, liberal, Christian democracy.
- Democratic Labour Party (PDT): centre-left, social-democratic, labourism.
- Solidarity (SDD): left-wing, social-democratic, labourism.
- Social Christian Party (PSC): right-wing to far-right, conservative, Christian democracy.
- Podemos (PODE): centre-right to right, nationalist, populist.
- Republican Party of the Social Order (PROS): centre-left, liberal, social-democratic, Christian democracy.
- Brazilian Labour Party (PTB): right-wing to far-right, social conservatism, Brazilian nationalism, right-wing populism.
- Socialism and Liberty Party (PSOL): left-wing to far-left, social-democratic, anti-capitalist, environmentalist.
- Forward (Avante): centre, Third Way, populism.
- New Party (NOVO): centre-right to right-wing, liberalism.
- Communist Party of Brazil (PCdoB): left-wing, Communism, Marxism–Leninism.
- Citizenship (Cidadania): centre to centre-left, social liberalism, Third Way.
- Patriot (Patriota): right-wing to far-right, social conservatism, economic liberalism, militarism.
- Green Party (PV): centre to centre-left, social-democratic, environmentalist, green politics.
- Sustainability Network (REDE): centre to centre-left, green politics, progressivism, environmentalism.
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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