Brazil Economy

In: Business and Management

Submitted By sandeemethil
Words 416
Pages 2
Brazil’s future
Has Brazil blown it?
Four years ago the Brazil economy was rocketing which barely stumbled after the Lehman collapse in 2008 and in 2010 grew by 7.5%, its strongest performance in a quarter-century. The progress has however reduced and hundreds of thousands took to the streets in June in the biggest protests for a generation, complaining of high living costs, poor public services and the greed and corruption of politicians.
Brazil has done far too little to reform its government in the boom years. Brazil’s public sector imposes a particularly heavy burden on its private sector. Companies face the world’s most burdensome tax code, payroll taxes add 58% to salaries and the government has got its spending priorities upside down. Considering the pension, the average Brazilian can look forward to a pension of 70% of final pay at 54. Despite being a young country, Brazil spends as big a share of national income on pensions. It spends just 1.5% of GDP on infrastructure, compared with a global average of 3.8%, even though its stock of infrastructure is valued at just 16% of GDP, compared with 71% in other big economies. Dilma Rousseff, the President of Brazil, has scared investors away from infrastructure projects and undermined Brazil’s hard-won reputation for macroeconomic rectitude by publicly chivvying the Central Bank chief into slashing interest rates.
The good part of economy is because of the efficient and entrepreneurial farmers, the world’s third-biggest food exporter. It has several manufacturing jewels, and is developing a world-class research base in biotechnology, genetic sciences and deep-sea oil and gas technology. The consumer brands that have grown along with the country’s expanding middle class are ready to go abroad.
If Brazil has to recover from its vim, it has to 1. Improve its reform, the government cannot look to taxpayers…...

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