GDP growth is projected to reach 5% in 2021, but to slow down to 1.4% in 2022 and 2.1% in 2023. The vaccination campaign has accelerated and economic activity, underpinned by private consumption and investment, restarted as restrictions were lifted. Exports have benefited from the global recovery, the robust demand for commodities and a weak exchange rate. However, supply bottlenecks, lower purchasing power, higher interest rates and policy uncertainty have slowed the pace of recovery. The labour market is recovering with some delay and unemployment remains above pre-pandemic levels.
The need to rekindle economic activity after the pandemic only intensifies the urgency of tackling long-standing structural policy challenges. To sustain strong growth productivity needs to increase, as well as protection of those in need and economic opportunities for all.
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2021 Structural Reform Priorities
The COVID-19 pandemic has caused severe human suffering and triggered a deep recession in Brazil. Economic policies reacted in a timely and decisive manner to the crisis, supporting millions of Brazilians. But a strong and inclusive recovery from the recession will require long-lasting improvements in economic policies. Improving fiscal outcomes remains one of Brazil’s principal challenges given a high debt burden, to which the pandemic has added significantly.