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Brazilian economy in 2020: expectation v. reality

. Dec 22, 2020
expectation economy brazil Store in Salvador, Bahia. Photo: Joa Souza/Shutterstock

At the end of 2019, the mood in Brazil was one of cautious optimism. In the wake of the approval of a sweeping pension reform, the expectation was that the country had what it takes to approve other structural issues, such as simplifying Brazil’s Byzantine tax code, approving a new regulatory framework for sanitation services, and rationalizing the structure of public service in the country.

However, as was the case in countries around the world, the pandemic shattered any hopes of a positive year in economic terms. 

The agenda in Congress was consumed by coronavirus-related bills (as political scientist Beatriz Rey showed, they accounted for 46 percent of all legislation passed this year) and the government was forced to pour roughly BRL 1 trillion (USD 196 billion) in aid to companies and welfare policies to reduce the pain imposed by the crisis.

We have selected nine charts which explain how 2020 was much different from expectations:

</p> <div class="flourish-embed flourish-chart" data-src="visualisation/4742450"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/4742422"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/4707237"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/4742386"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/4707216"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/4742478"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/4742520"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/4742549"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/4742576"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <h2>Expectation for 2021</h2> <p>According to investment firm XP, a recovery is possible. &#8220;Brazil will enjoy low interest rates, grounded inflation, a desire for new structural forms and fiscal responsibility, as well as the beginning of a coronavirus vaccine campaign, which promises to be the relief everyone is hoping for and will certainly encourage financial markets.&#8221;</p> <p>Let&#8217;s see if that does indeed become a reality.

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