Current scenario of the Brazilian economy
After suffering a recession in 2020, the economy is expected to grow 4% in 2021, and industrial GDP, 4.4%. However, the Brazilian recovery has been heterogeneous, with sectors above the pre-pandemic level and sectors still below that level. Part of the differences in the pace of recovery of the Brazilian economy is explained by changes in the consumption pattern.
The economic recovery was strong for the manufacturing industry, with nine consecutive rises in hours worked in production, which took the indicator to its highest level since the end of 2015.
Emergency aid and permission for emergency looting helped to make up part of the population’s income losses due to the pandemic.
As a result, some of the most vulnerable families even observed an increase in income and could even increase consumption, especially of non-durable consumer goods, such as food, cleaning material and personal hygiene products.
Higher-income families increased savings, either as a precaution, or because of the impossibility of consuming due to the closing of commerce.
Currently, Brazil’s economy is ranked by the International Monetary Fund (IMF) as the world’s ninth economy, but it should drop to 12th position in the 2020 ranking. The last annual GDP update (2019) was R$7.3 trillions.
Industry and commerce, in general, started the recovery in May 2020 and quickly returned to the pre-pandemic level. However, the recovery has been heterogeneous, with sectors above the pre-pandemic level and sectors still below that level. Part of the differences in the pace of recovery is explained by changes in consumption patterns.
The five main sectors with the largest share in the value of the manufacturing industry are the food, petroleum and biofuels, chemicals, metallurgy and automotive vehicles segments. The five states with the largest share of GDP are São Paulo, Rio de Janeiro, Minas Gerais, Paraná and Rio Grande do Sul.
Even with the entire economic scenario and economic dependence on other countries, there is, in Brazil, a strong development in different types of industries, from the base to the high technology. This industrial growth is motivated by foreign capital and multinationals installed in Brazilian territory.
With the advance and consolidation of the capitalist system, as well as the spread of the globalization process, the tertiary sector, in addition to holding the largest economic share in Brazil, is also the fastest growing in the world.