Economics
Elusive Economic Growth Points to Depth of Brazil’s Problems
- Regulatory changes, difficult tax system seen among culprits
- GDP expanded 1.1% last year and 2019 expectations are tumbling
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President Jair Bolsonaro’s administration bets that overhaul of an unsustainable pension system will unlock Brazil’s economic potential, but sinking growth projections show the country has deeper-rooted problems.
The recovery is again disappointing despite a full year of record-low borrowing costs and a recent improvement in business confidence. Latin America’s largest economy grew a paltry 1.1 percent in 2017 and in 2018. On Thursday the central bank cut its 2019 growth forecast to only 2 percent, matching a dwindling consensus estimate. Economists started cutting their projections even before the most recent signs of trouble for pension reform.