Brazil Has Almost Everything. So Why Isn’t It Richer?
Oil. Agriculture. Minerals. Renewable Energy. 200 Million Consumers. World-Class Fintech. Brazil’s Problem Is No Longer Potential. It Is the Failure to Convert Potential Into Productivity.
Brazil has spent decades being described as the country of the future.
At some point, that description stops being a compliment.
It becomes an accusation.
Because Brazil does not suffer from an obvious shortage of economic advantages.
It has land.
Water.
Oil.
Iron ore.
Agriculture.
Hydroelectric power.
Wind.
Solar.
A continental domestic market.
A sophisticated banking system.
One of the world’s most successful instant-payment infrastructures.
A major industrial base.
An enormous food-exporting industry.
Access to both Western and Chinese markets.
No major geopolitical enemy on its borders.
And a population of more than 200 million people.
If an economist were allowed to design an emerging-market superpower from scratch, much of the Brazilian starting package would look extraordinarily attractive.
And yet the IMF’s latest assessment expects Brazilian growth to settle at only about:
2.5% in the medium term.
That is the Brazilian paradox.
Brazil does not lack potential. It has accumulated potential for decades. What it lacks is the ability to convert extraordinary advantages into extraordinary productivity.
And that is a much more serious problem than the usual discussion about whether Brazil will grow 2.1%, 2.4% or 2.7% next year.
A Superpower Growing Like a Mature Economy
The IMF expects Brazil to grow approximately 2.4% in 2026, helped partly by favourable terms of trade, fiscal support and higher oil prices.
Over the medium term, growth is expected to settle around 2.5%.
Think about that number.
India is still trying to build much of the infrastructure Brazil already possesses.
China has to import enormous quantities of the commodities Brazil produces.