19 February 2019 - 17:00
The recovery process
According to data from the IMF, Brasil is expected to record a growth of 2.5% in 2019
Following the 2015-2016 recession, one of the worst-ever in its history, the Brazilian economy has shown signs of recovery in 2017. According to data from the International Monetary Fund (IMF), the largest economy in Latin America is expected to record a growth of 2.5% in 2019, the best figures since 2013.
Investments and capital flows are expected to improve significantly thanks to the sweeping reforms set out by Jair Bolsonaro, Brazil’s new president. Mr Bolsonaro’s approach combines tax cuts aimed at driving private investments, lower public spending and a wide-ranging program of privatizations and deregulations, as testified by the setting-up of a government department with the specific task of accelerating the sale of public assets.
All eyes are now set on the president’s commitment to overhaul the country’s pension system. A key point of the reform will be bringing up the retirement age in Brazil, a step seen as reflecting the country’s rising life expectancy and declining birth rate, which was down to 1.73% in 2016 from 2.36% in 2000. Alongside falling fertility rates, the country has recorded an ever-larger number of people leaving rural areas and moving to cities: in 2000, 18.8% of the population lived in rural areas while in 2016 that figure was down to 14.07%.
The government’s plans to attract investments are expected to be boosted by the imminent discussion in parliament of an anticorruption law and the announcement of a strategy aimed at contrasting organized crime and money-laundering activities.