Brazil’s economy is expected to grow 1.8% in 2024 before accelerating to 2% in 2025, according to the ‘Brazilian Economic Survey’ report published on Monday by the Organization for Economic Co-operation and Development (OECD).
The OECD assessed in a statement that increasing productivity will be fundamental to sustaining growth in Brazil and stressed that “Recent reforms have reduced bureaucracy and unnecessary regulation, but more efforts are needed to reduce administrative burdens in markets for goods and services that hinder competition and productivity growth.”
The organization emphasized that the sustainability of Brazil’s public finances can be further strengthened as it believes that the country’s public debt remains high compared to other emerging market economies.
“A new fiscal framework has been established and is expected to be implemented. The planned reform of the fragmented consumption tax system will substantially reduce compliance costs and there is also room to make public spending more efficient.”defended the OECD.
The OECD also emphasized that Brazil must accelerate the green transition to reduce greenhouse gas emissions and continue to strengthen the implementation of the Forest Code to combat deforestation, develop rural economies and boost innovation.
“Public infrastructure is particularly vulnerable to climate shocks and investments in infrastructure are low in international comparison. Better planning, including closer coordination between federal and subnational governments, and reducing the risks associated with long-term infrastructure projects have the potential to attract more private and international investors. financing”according to the OECD.
At a press conference, the OECD recommended that Brazil and Mercosur (a bloc formed by Brazil, Argentina, Paraguay and Uruguay and which approved the inclusion of Bolivia) reform their tariffs and conclude the agreement with the European Union (EU). greater participation of the Latin American economy in world trade.
The Deputy Director of the OECD Ministry of Economy, Isabell Koske, recalled that Brazil’s trade flow represents only 29% of gross domestic product (GDP), half the average of Colombia, Chile, Costa Rica and Mexico, countries with a similar level. development.
The OECD also ruled that concluding the treaty with the EU and reducing Mercosur tariffs would be “a way to increase competitiveness and achieve greater benefits”of trade.
Despite the setbacks, both the European Commission, responsible for negotiations in the European bloc, and Mercosur officially maintain their intention to conclude as soon as possible an agreement that has been under discussion for more than twenty years.
Source: DN
