Haddad says Brazil cannot afford to grow less than world average. It consistently has of late

Finance Minister Fernando Haddad said on Wednesday that Brazil can not afford to grow less than the global average. 

“We have no right to offer society anything less than growth above the world average, with everything that destiny has placed in our hands. We have the Brazilian people, the natural riches, our cultural traditions. It’s a lot to waste such a moment,” he said during a corporate award ceremony by business magazine Exame. 

But the fact is, Latin America’s largest economy has been doing precisely this for the past ten years.

In the final stage of the 2014-2016 crisis, when the Workers’ Party was in power with Dilma Rousseff, the Brazilian gross domestic product plummeted by more than 3 percent, equivalent to 6 percent less than the global average. 

Deficits swelled, inflation and unemployment edged up, and confidence in the government disappeared. This economic turmoil all but killed any support Ms. Rousseff enjoyed in Congress, and lawmakers jettisoned her from office.

However, analysts believe things could be different this year. After two quarters posting growth rates that outperformed expectations, forecasts for Brazil’s 2023 GDP growth were revised upwards. The forecast for the global economy, although also altered, remained below the 3.5 percent advance seen in 2022.

At the end of last year, the International Monetary Fund predicted expansion of the Brazilian economy by just 0.9 percent in 2023, compared to 2.8 percent for the global average. The fund revised its projections in July to 2.1 percent for Brazil and 3 percent for the global economy. 

More recently, leading financial institutions adjusted their forecasts for Brazilian GDP to 3 percent. While the global economy could have a lost decade in the making, Brazil may swerve from its track record in 2023.

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