Challenges ahead for the Brazilian economy in 2019

President-elect Jair Bolsonaro takes office on January 1st with a mission to bring the Brazilian economy out of its four-year slump. Even if the recession is over, the economic crisis remains a reality for millions of Brazilians. The country has become poorer and even more unequal, and about a quarter of millennials are neither studying nor working. The challenges are many, and here we will talk about the main issues future President Bolsonaro’s administration must address.

We highlight what University of Brasília economics professor Roberto Ellery calls Brazil’s three main bottlenecks: “lack of productivity (long-term), poor investments (mid-term), and the need to address fiscal issues (short term).” Each of these challenges will be broken down separately:

Productivity issues

“In the long run, high levels of productivity are the engine for any economy that wants to become developed,” writes Professor Ellery. In that regard, Brazil is far from having an acceptable performance. The chart below shows how productivity levels have evolved in different countries since 1970.

While it may seem unfair to compare Brazil to South Korea or the U.S.—the world’s most powerful economy—these two countries offer some perspective on what it takes to be a top economy. Even...