The Brazilian double disease

Otaviano Canuto

Chapter 13 in The Elgar Companion to the Economies of Latin America and the Caribbean, 2025, pp 286-297 from Edward Elgar Publishing

Abstract: Brazil's overall growth performance over the past four decades has been lackluster. A new growth spurt of GDP per capita happened between 2003 and 2009, with annual growth averaging 2.6% per year. However, the economic expansion tapered off after 2010. The country seems to have fallen into a “middle-income trap.” The Brazilian economy has been suffering from a double disease: a combination of ‘productivity anemia’ and ‘public sector bloat.’ On the one hand, the mediocre performance of productivity in Brazil in recent decades has limited its GDP growth potential. On the other, the gluttony for expanding public spending became increasingly incompatible with these limits on the potential expansion of GDP, particularly since the former has not been achieving socioeconomic results that match such appetite. Healing the double disease will require tackling both productivity and public-spending quality issues.

Keywords: Brazil; Middle-income trap; Productivity anemia; Public sector bloat; Economic growth; Barriers to business; Public spending (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035317196
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