Economic activity is slowing due to weaker private consumption and exports. Real GDP is projected to grow by 1.7% in 2023 and 1.2% in 2024. Lower employment growth, still high inflation and tighter credit conditions will limit household spending capacity despite higher social transfers. Private investment will continue to rise but at a slower pace. Exports will be affected by lower commodity prices and subdued global demand.
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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.