CEPII, Recherche et Expertise sur l'economie mondiale
Brazil: self-inflicted pain


Cristina Terra

The Brazilian economy grew 7.5% in 2010, when Mr. Lula finished his second mandate as president with a popularity rate of 85%. Six years later, his successor, Ms. Rousseff, is suspended from the presidency under an impeachment trial, while the economy endures a recession of 3.8% of the GDP for the second consecutive year. In this article I argue that the current economic crisis is the result of ill-advised economic policies. Ms. Rousseff’s government altered each one of the tripod of policies implemented by Mr. Cardoso in the 1990s, which had been successful in maintaining macroeconomic stability (namely, the inflation targeting regime, the floating exchange rate and the fiscal austerity). Also, Ms. Rousseff’s government greatly expanded the improperly designed industrial policies that were reintroduced in Brazil during the second mandate of Mr. Lula, which created distortions in the economy and a large fiscal burden for the government. The acting president, Mr. Temer faces great difficulties to put the economy back in order, since unpopular measures are required that are very hard to be implemented in the midst of the current political turmoil.

  • Monthy inflation and stabilization plans in Brazil January 1982 - December 1995 (%)
  • Inflation and GDP annual growth in Brazil 1981-1995 (%)
  • Poverty in Brazil (% of poor households in the population)
  • Gini index of income inequality in Brazil 1981-2014
  • Annual GDP growth 1994-2015 (%)
  • Allocative efficiency in manufacturing
  • Inflation and interest rate 2008-2015 (monthly change, %)
  • Monthly exchange rates of Brazilian Real January 2005 - November 2015
  • Stock of reserve assets, trade and financial accounts balances in Brazil January 2005 - March 2016 (billion USD)
  • Public Debt in Brazil December 2002 - March 2016 (in % of GDP)
  • Fiscal balance in Brazil December 2002 - March 2016 (in % of GDP)
  • Inflation in Brazil, 2005-2015 (consumer price index, %, annual)
  • Labor market in Brazil January 2013 - November 2015 (monthly statistics)
  • Pensions in Brazil: Key indicators in 2014 Brazil OECD

  •  Panorama du CEPII
    N°2016-03, juillet 2016


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