Brazil Economic Outlook
Latin America's key economy:
Brazil is the largest and most populous economy in Latin America, with GDP worth around a third of the regional total. Brazil is also the third-largest emerging market after China and India. Brazil has a diverse economic structure encompassing agriculture, mining, manufacturing, and services.
Commodity superpower:Brazil is a global leader in agriculture, renowned for being one of the world's largest producers of coffee, soybeans, beef, sugar cane and ethanol. The sector benefits from advanced agricultural technology and vast arable land. Brazil is also an important producer of iron ore and oil, and holds large reserves of minerals that will be key in the green transition, such as graphite, nickel, manganese and rare earth elements.
Trade policy:Brazil's is the leading member of the Mercosur trade pact, along with fellow members Argentina, Uruguay and Paraguay. That said, trade policy is protectionist: Average tariff rates are more than double the Latin American average. Moreover, Mercosur's proposed trade deal with the EU has been on hold for years over environmental concerns.
Disappointing economic performance:Brazil saw sustained economic growth in the early- to mid-2000s in line with the commodities super cycle but has languished since the global financial crisis, with GDP expanding a mere 0.5% on average in the decade to 2023.
Challenges:A bloated, inefficient public sector, the highly fragmented Congress, elevated public debt and unemployment, crime and rampant inequality are particular challenges. Moreover, the country's industry is relatively uncompetitive internationally: Manufacturing as a share of GDP has tumbled from over 30% in the late 1980s to around 10% today.
Brazil's economic outlook:Following the divisive presidency of right-wing Bolsonaro, former President Lula was re-elected in late 2022. His government will need to tread a fine line between maintaining social support programs and fiscal prudence; if the budget deficit grows too wide, it could cause markets to lose confidence in the country’s ability to pay its debt.. Our panelists are not overly optimistic on the outlook for the economy in the coming years and see GDP growth below the regional average, as current economic problems are likely to persist over our forecast horizon. Brazil is set to remain firmly stuck in the middle-income trap—along with much of the rest of the continent.
Brazil's Macroeconomic Analysis:
Nominal GDP of USD 1,952 billion in 2022.
Nominal GDP of USD 2,173 billion in 2023.
GDP per capita of USD 10,640 compared to the global average of USD 10,589.
GDP per capita of USD 9,615 compared to the global average of USD 10,589.
Average real GDP growth of 0.7% over the last decade.
Average real GDP growth of 0.8% over the last decade.
Sector Analysis
In 2021, services accounted for 74% of overall GDP, manufacturing 10%, other industrial activity 9%, and agriculture 7%. Looking at GDP by expenditure, private consumption accounted for 61% of GDP in 2021, government consumption 19%, fixed investment 19%, and net exports 1%.International trade
In 2021, manufactured products made up 25% of total merchandise exports, mineral fuels 14%, food 35%, ores and metals 20% and agricultural raw materials 5%, with other categories accounting for 1% of the total. In the same period, manufactured products made up 76% of total merchandise imports, mineral fuels 14%, food 5%, ores and metals 4% and agricultural raw materials 1%, with other goods accounting for 0% of the total. Total exports were worth USD 340 billion in 2023, while total imports were USD 241 billion.Main Economic Indicators
Economic growthBrazil's GDP growth over the last decade was characterized by economic turbulence and modest recoveries. The country entered a severe recession in 2015-2016, driven by political instability and declining commodity prices. Subsequent years saw gradual recovery, although growth remained sluggish. The COVID-19 pandemic brought another downturn in 2020, but the economy showed resilience in the following years, partly due to commodity exports and strong fiscal stimulus. However, a lack of structural reforms and a sclerotic public sector continue to hold back economic potential. To read more about GDP growth in Brazil, go to our dedicated page.
Fiscal policy
Brazil's fiscal deficit grew over the last decade and remained much larger as a share of GDP than the global average, driven by political instability and economic challenges. High spending levels and structural issues, including pension liabilities, contributed to the deficit's growth. Efforts to implement austerity measures faced political resistance. The COVID-19 pandemic further exacerbated the fiscal situation, leading to increased government spending and a wider deficit. Find out more on our dedicated page.
Unemployment
Brazil's unemployment rate over the last decade reflected the country's economic struggles and political changes. The rate began to rise significantly in 2015 due to a recession. The situation worsened with the COVID-19 pandemic, leading to the unemployment rate moving further into double digits. By 2023, the job market had recovered somewhat but unemployment remained structurally high, reflecting a lack of skills among some workers and the economy's inability to create enough jobs for its growing population. For more information on Brazil's unemployment click here.
Inflation
Brazil's inflation over the last decade was characterized by volatility, with rates frequently fluctuating between 3% and 10%. Economic and political instability, fluctuating commodity prices, and shifts in fiscal policies largely influenced these changes. High inflation periods were marked by currency depreciation and large fiscal deficits. Inflation fell sharply in 2023 as the central bank's double-digit policy rate dampened demand and international price pressures pulled back. Go to our Brazil inflation page for extra insight.
Monetary Policy
Brazil's central bank policy rates fluctuated significantly over the last decade, mirroring the country's economic challenges. Rates were initially high due to inflation concerns but were cut to historic lows during the pandemic to stimulate growth. Post-2020, rates were again increased in response to rising inflation and economic recovery needs, though the Central Bank began another easing cycle midway through 2023 as concerns over prices dimmed. See our Brazil monetary policy page for additional details.
Exchange Rate
Over the last decade, the Brazilian real faced significant depreciation against the dollar, largely due to political turmoil, economic instability, significantly higher inflation than in the U.S. and low commodity prices early in the period. That said, Brazil's currency did manage to claw back some ground in 2022 and 2023 on high interest rates, strong prices for key commodity exports, and a bumper harvest. For more info on the real, click here.
Economic situation in Brazil
Our panelists expect sequential GDP growth to have decelerated in Q3 and further so far in Q4. The data at hand supports the projections. In August, the economy grew 0.2% month on month, surpassing market expectations of stagnation but unable to offset the previous month's sharper-than-initially-estimated 0.6% contraction. In addition, inflation averaged above Q2 in Q3, likely limiting private spending. More positively, industrial output plus the services PMI improved compared to Q2 in Q3. In other news, recent estimates point to another record harvest in the 2024–2025 crop season—which ends in August next year—despite recent drought, heatwaves and wildfires. In politics, President Lula’s allies performed poorly at the 6 October municipal elections; weaker voter sentiment towards the incumbent administration is a factor to monitor ahead of the 2026 presidential elections.Brazil Economic Forecasts
Projections out to 2034.54 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 50 expert analysts.
Want to get insight on the economic outlook for Brazil in the coming years? FocusEconomics collects projections out to 2034 on 54 economic indicators for Brazil from a panel of 50 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Brazil economy. To download a sample report on the Brazil's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.
Brazil Economic Indicators
Frequently Asked Question about Brazil's Economy
What is the main economic sector in Brazil?
Is Brazil doing well economically?
What is Brazil's biggest export?
The services sector is the main economic sector in Brazil, accounting for more than half of GDP. It includes activities such as retail, tourism, financial services, and healthcare. However, the agricultural and mining sectors are key to exports.
Brazil's economy has recovered steam post-COVID-19, fuelled by exports and household consumption. However, it faces a large public debt and policy uncertainty, and GDP growth is forecast to be below the Latin American average in the coming years.
Brazil's biggest export is iron ore; Brazil is the world's second-largest producer of iron ore after Australia. Iron ore is a key ingredient in steel production. Brazil's iron ore is some of the highest quality in the world, and it is in high demand by steelmakers around the world. Other major exports from Brazil include soybeans, crude petroleum, raw sugar, and poultry meat.