In 2003-2011 Brazil implemented a number of sweeping economic reforms. These included measures to reduce inflation, boost exports, stabilize the pace of economic growth and significantly boost personal consumption, Analytical Center experts note in their new bulletin on the current trends in the global economy titled Brazil: Pulling out of a Socio-Economic Crisis.
However, achieving sustained economic growth, improving the position of the middle class through increased income, holding back inflation and successful development of oil production failed to break the country out of the newly industrialized tramp. There are still unsolved problems with finding new development drivers, low productivity and uncompetitive industry, the analysts believe. Rising imports, excessive growth of state spending and a declining GDP growth rate brought about a crisis as exports prices fell.
According to the analysts, the rising share of the middle class and strengthening of the civil society also made people less willing to turn a blind eye to corruption among the industrial and political elites. The combination of a socio-political crisis of trust in the government and political struggle arising from efforts to curb corruption exacerbated the economic recession of 2014-2016. Despite a very tough socio-economic situation, in 2017 Brazil's economy began to grow despite the fact that state debt, unemployment and inflation remain high.
The new stage in the country's development will require modernization of production and a more competitive industry in addition to the tangible success of the economic policy Brazil's been pursuing in the 21st century and the ending of the economic recession in 2017, the experts note. The growth of personal consumption and improvements in education are a good foundation for tackling the problems of the next stage. Effectively, the country is facing two problems at the moment: the newly industrialized country trap and volatile economic growth.
For more details see the bulletin Brazil: Pulling out of a Socio-Economic Crisis.
Other bulletins on the current trends in the global economy can be found in Publications.