Cityscape of São Paulo

Economic situation Dip in growth overcome

In 2014, after a long period of stable growth, Brazil slipped into an economic crisis. In both 2015 and 2016, gross domestic product (GDP) sank by 3.5 per cent. The country is heavily indebted and unemployment has risen massively (2018: 12 per cent).

In 2017, a slight economic recovery was recorded, with GDP growing by one per cent. For the period from 2018 onwards, the International Monetary Fund (IMF) expects this growth to continue. The strong domestic market of more than 200 million inhabitants, which accounts for over 80 per cent of GDP, remains the main driver of the economy.

Two major concerns are the low competitiveness of local industry and Brazil's budget deficit, which recently rose quite sharply. At the same time, however, the country remains an attractive destination for foreign investment, as shown by the clear increase in direct investment of about 60 billion US dollars in 2018.

Brazil's long-term economic potential is considerable: the country is rich in natural resources and has a large, well-trained workforce. Although agriculture now only contributes a bare five per cent to the country's gross domestic product, it makes an important contribution towards global food security. Brazil is one of the world's biggest producers of coffee, sugar, meat and soya products.