Economic Analysis


Population 212.6 million
GDP per capita 7,564 US$
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major macro economic indicators

  2020 2021 2022 2023 (e) 2024 (f)
GDP growth (%) -3.3 5.0 2.9 2.2 1.2
Inflation (yearly average, %) 3.2 8.3 9.3 4.8 4.2
Budget balance (% GDP) -13.3 -4.3 -4.6 -7.7 -7.0
Current account balance (% GDP) -1.9 -2.8 -3.0 -1.8 -1.5
Public debt (% GDP) 86.9 78.3 72.9 75.5 78.0

(e): Estimate (f): Forecast


  • Varied mineral resources and agricultural harvests
  • Large population (estimated at 203.6 million)
  • Well-diversified industry
  • Strong foreign exchange reserves
  • Net creditor in foreign currency


  • Sensitive fiscal position
  • Infrastructure bottlenecks
  • Low level of investment (roughly 20% of GDP)
  • High production costs (wages, energy, logistics, credit) that harm competitiveness
  • Shortage of qualified labour, inadequate education system

Risk assessment

Economy to decelerate somewhat in 2023

Brazil´s GDP climbed by 4% YOY (from 1.9% YOY in Q4 2022) and by 1.9% QOQ (from -0.1% QOQ in Q4 2022) in Q1 2023. Nonetheless, the figure breakdown reveals a weaker and uneven economic momentum. On the demand side, the positive external sector contribution was driven by a deeper drop in imports (-7.1% QOQ) than in exports (-0.4% QOQ), thereby highlighting the weakness of domestic demand. Regarding the latter, household consumption growth actually decelerated to a mild +0.2% QOQ (from 0.4% QOQ in Q4 2022) and gross fixed investments fell for a second quarter in a row (-3.4% QOQ vs -1.3% in Q4 2022). On the supply side, activity was strongly underpinned by agriculture (+ 21.6% QOQ), as a result notably of a record soybean crop (after adverse weather conditions in 2022). Looking ahead, GDP is expected to decelerate in the coming quarters as the positive agriculture contribution gradually fades and lending conditions remain tight. The latter led to a sharp deterioration in payment experience, with the number of companies that filed for Chapter XI protection rising by 51% YOY during the first five months of 2023 (the highest since 2018). While the central bank should start to cut the policy rate from Q3 2023 onwards (on hold at 13.75% per annum since August 2022), the easing cycle should be very gradual. Importantly, household consumption (61% of GDP) should somewhat be supported by a still resilient job market, social policies (such as the rise of the real minimum wage and the expansion of the Bolsa Família welfare program), debt renegotiation programs and as inflation appeases. Meanwhile, gross fixed investments are expected to contract slightly as global credit conditions remains tight. Despite relatively lower average commodity prices in 2023 (accounting for 60% of foreign sales), the bright 2022-2023 crop outlook and relatively higher growth in China (the main export destination), along with the easing of Covid-19 lockdowns will allow exports to grow even as the global economy loses traction.

Fiscal deficit to widen, while the external shortfall will narrow

Brazil will maintain an adequate external position in 2023, with the current account deficit expected to narrow somewhat. The trade balance surplus should increase (2.1% of GDP in 2022) since the deceleration in import growth (reflecting weaker domestic activity) should exceed that of exports. In addition, the primary income deficit (3.1% of GDP) should be curtailed by the drop in repatriated foreign investment income (albeit still high during the first five months of the year). Meanwhile, the services deficit (1.9% of GDP) is likely to also slightly narrow driven by the reduction of average freight cost, which should offset higher foreign travel. On the financing side, foreign direct investment (4.8% of GDP) will continue to comfortably cover the external shortfall. FDI recovered the 2019 pre-pandemic level in 2022, but should marginally weaken in 2023, reflecting higher financing costs and a weaker activity outlook. Meanwhile, foreign currency reserves will remain robust (ensuring an import coverage of 15 months as at May 2023). Last, total gross external debt (including intercompany loans and domestic fixed income securities held by non-residents) stood at 35% of GDP in May 2023, with its public share representing 5% of GDP.
Regarding the fiscal accounts, the budgetary deficit is set to climb in 2023, owing to a current rise in public expenditure (including higher expenses with the Bolsa Família social welfare program, a real increase in the minimum wage, education, court sentences and court-ordered debt payments), lower average commodity prices and higher interest payments. Moreover, the government was able to approve a new fiscal framework in Congress in late June 2023 (as of early July 2023 the bill returned to the Lower House for the final vote). The new rule replaces the spending cap created in 2016, limiting the growth of expenditure to inflation, and which worked with several exceptions. Generally, the new framework defines that the real growth rate of primary spending may vary between 0.6% and 2.5% per year, or correspond to 70% of revenue growth. It also re-established annual targets for the primary result (before interest payments). While the approved bill does not guarantee a downward trajectory for public debt (its effectiveness relies on the capacity to increase public revenues), it will prevent an explosive trajectory of the index. Overall, the already elevated gross public debt (95% is domestically owed) is set to further increase in 2023.


Brazil switches back to left

Luiz Inácio Lula da Silva (better known as Lula), from the leftist Labour Party and formerly twice president (2003-2010), took office again in January 2023 after a defeating by a tight margin the incumbent leader Jair Bolsonaro from the right-wing Liberal party in the presidential election runoff. Shortly after his inauguration on 8 January, the new government faced its first challenge when supporters of Mr. Bolsonaro invaded and wilfully damaged the presidential palace, Congress and Supreme Court in the capital Brasília, demanding intervention by the Armed Forces. The prompt and unified response of the three arms of government (executive, judicial and legislative) meant that the movement was contained without causing major disruption. While the political environment is still somewhat polarised, tensions have eased significantly since January. However, challenges persist on another spectrum. The incumbent power depends on a coalition with centrist parties in order to pass constitutional amendments. This is because in the Lower House the left-leaning members hold 25% of the seats, while centrists and centre-right wing members have 24% and 51% of the seats, respectively. The framework is no better in the Senate, with the leftists holding 16% of the seats, the centrists 40% and centre-right wing members 44%. Lula favours a more active role for the state in the economy, including raising the participation of state banks, halting new privatisations (and shifting the emphasis to public-private partnerships) and reversing the state-owned oil company Petrobras´ divestment policy towards more investments to increase domestic energy autonomy. A tax reform is also among the top priorities. The government will initially seek to approve the unification of five consumption taxes that will be replaced by a federal tax and another shared by states and municipalities (approved by the Lower House in July 2023 and now before the Senate). The change is due to begin in 2026, but there will be a phase-in transition period until 2033. Income tax reform will be part of a second stage of the reform which is expected to gain momentum in the second half of 2023. In foreign policy, relations with neighbouring countries (many of which have also leaned to the left in recent years) have been strengthened, including with Venezuela, with which relations had been severed since 2019. Last, the new government is also poised to sign the Mercosur trade agreement with the European Union, which has been stalled due to environmental concerns raised by the EU member states. However, consensus is still lacking on two major topics: Lula has criticised an addendum which imposes penalties for nations failing to comply with climate goals and a procurement clause allowing European companies to sell to Brazil's public sector.


Last updated: September 2023



Bills of exchange (letra de câmbio) and, to a lesser extent, promissory notes (nota promissória) are the most common form of credit note used in local commercial transactions. The validity of either instrument requires a certain degree of formalism in their issuance. The most commonly payment method used in Brasil is “Boleto bancário” which is an official Brazilian payment method regulated by the Central Bank of Brazil. It is a push payment system, which was launched in 1993 and today generates 3.7 billion transactions per year.  The payment process for “Boleto bancário” transactions is similar to that of wire transfer or cash payment methods. Customers are provided with a prefilled boleto bancário payment slip. At this point, the customer has the option of printing the form and paying it physically at any bank branch or at authorized processors such as drugstores, supermarkets, lottery agencies and post offices. Additionally, it can also be paid electronically at any of the more than 48,000 ATMs in Brazil, as well as through internet banking or mobile banking apps, which are widely used in the country. Although the use of the above credit payment instruments for international settlements is not advisable, they nonetheless represent, an effective means of pressure in case of default, constituting an extra-legal enforcement title that provides creditors with privileged access to enforcement proceedings.

The duplicata mercantil, a specific payment instrument, is a copy of the original invoice presented by the supplier to the customer within 30 days for acceptance and signature. It can then circulate as an enforceable credit instrument.

Bank transfers, sometimes guaranteed by a standby letter of credit, are also commonly used for payments in domestic and foreign transactions. They offer relatively flexible settlement processing, particularly via the SWIFT electronic network, to which most major Brazilian banks are connected. For transfers of large sums, various highly automated interbank transfer systems are available, e.g. the STR real time Interbank Fund Transfer System (sistema de transferência de reservas) or the National Financial System Network (rede do sistema financeiro nacional, RSFN).

Debt collection

Amicable Phase

Creditors begin this phase by attempting to contact their debtors via telephone and email. If unsuccessful, creditors must then make a final demand by a registered letter with recorded delivery, requesting that the debtor pay the outstanding principal increased by past-due interest as stipulated in the transaction agreement. In the absence of an interest-rate clause, the civil code stipulates use of the penalty interest rate imposed on tax payments, which is 1% per month past due. When creditors are unable to reach their debtors by phone and/or email, a search of the company’s contacts, partner businesses, and owners is conducted. If there is still no contact, this leads to an investigation of assets, an on-site visit, and an analysis of the debtor’s financial situation so as to ascertain the feasibility of taking legal action. Considering the slow pace and the cost of legal proceedings, it is always advisable to negotiate directly with defaulting debtors where possible, and attempt to settle on an amicable basis, taking into consideration that a repayment plan may last for up to two years.


Legal proceedings

The legal system comprises two types of jurisdiction. The first of these is at the state level. Each Brazilian state (26 states, plus the Distrito Federal of Brasilia), notably including a Court of Justice (Tribunal de Justiça) whose judgments can be appealed at the state level. Legal costs vary from state to state. The second type of jurisdiction involves the Federal Courts. There are five regional Federal Courts (Tribunais Regionais Federais, TRF), each with its own geographic competence encompassing several states. For recourse on non-constitutional questions, TRF judgments can be appealed to the highest court of law, the Superior Tribunal de Justiça (STJ) located in Brasilia.


Monitory Action

The ação monitória is a special procedure that can be filed by any creditor who holds either a non-enforceable written proof, or any proof that is considered as an extrajudicial instrument recognized by the law as enforceable (even if it does not comply with all the legal requirements). If the debtor’s obligation is deemed certain, liquid and eligible, the Municipal Courts usually render payment orders within fifteen days. If the debtor fails to comply within three days, the order becomes enforceable. In cases of appeal, the creditor has to commence formal ordinary legal action. The difference between this procedure and the Enforcement Proceeding lies in the legal requirements and in the possibility of questioning the merit of the obligational relationship by the debtor over the course of the suit. The ação monitória is slower than a regular Enforcement Proceeding: if the debtor presents an objection in the court, the merits of the commercial relation will be thoroughly discussed in the same fashion as a Standard Lawsuit. The estimated period of this lawsuit is on average two years.


Ordinary proceedings

Ordinary proceedings are presided over by an interrogating judge (inquisitorial procedure), and require examination of evidence submitted by each party in conjunction with study of any expert testimony. The creditor must serve the debtor with a registered Writ of Summons, which the debtor must answer within 15 days of receipt. The initial proceedings encompass an investigation phase and an examination phase. The final step of the process is the main hearing, during which the respective parties are heard. After this, a judgement is made by the court. The tribunal may render a default judgment if a duly served writ is left unanswered. It takes two to three years to obtain an enforceable judgment in first instance.

Enforcement Proceeding

On average and within the main states, it takes a year for a judgement to be made following the initiation of legal proceedings.


Court Decision

A final judgment is normally automatically enforced by Brazilian Courts. Since the reforms in 2005 and 2006, attachment of the debtor’s assets is possible if the latter fails to obey a final order within three days. In practice, execution can prove difficult, as there are very few methods for tracing assets in Brazil.

Foreign awards can be enforced if they meet certain conditions: the homologation has to be concluded by the Superior Court to be enforced in Brazil, the parties have be notified, and the award has to comply with all the requirements for enforcement (such as being translated from Portuguese by a public sworn translator).


Extrajudicial Instruments

The enforcement of extrajudicial instruments is a legal type of enforcement granted to the creditor in order to allow him to claim his rights against the debtor. This is the most direct and effective court vehicle to recover credits in Brazil. This lawsuit does not require prior guarantees from foreign creditors (as the bond in the monitory suit for example). Moreover, Brazilian legislation renders some documents enforceable. These are separated in two main categories: Legal enforcement titles (including judgments made by a local Court recognizing the existence of a contractual obligation, and court-approved conciliations and arbitral awards) and extra-legal enforcement titles, which includes bills of exchange, invoices, promissory notes, duplicata mercantil, cheques, official documents signed by the debtor, private agreements signed by debtor, creditor and two witnesses (obligatory)  as an acknowledgement of debt, secured agreements, and so on. It is obligatory to submit the original versions of these documents – copies are not accepted by the court. 

Insolvency proceedings

Out of Court restructuring

Debtors can negotiate a restructuring plan informally with their creditors. The plan must represent a minimum of 60% of the total debt amount. This plan must be approved by the court.


Judicial Restructuring

Debtors make a restructure to the request to the court, or request the conversion of a liquidation request to the court from their creditor(s). If the plan is accepted by the court, debtors typically have 60 days to present a list with all debts from creditors, and a payment plan. A judge then schedules two creditors’ meetings, with the second only occurring if the first one does not take place. During these meetings, the proposed plan must be accepted by a majority of creditors. Once accepted, payments start as decided in the approved plan. The estimated period of this lawsuit is between 5 and 20 years.



The principal stages of liquidation are as follows:

  • liquidation can be requested by either debtors (auto-falência), or any of their creditors if the debt totals more than 40 times the minimum wage;
  • the initiating party must prove the existence of a net obligation, overdue and defaulted by presenting protested enforceable title (special protest – personal notice of debtor);
  • upon analysis of a debtor’s financial situation, the judge can decide that the company must be liquidated.

All of the company’s assets have to be sold and the obtained amount is shared equally between creditors, respecting eventual privileges. The estimated period of this lawsuit is between 7 and 20 years.

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