Post-Covid Brazil and the new government: Economy and foreign policy

Abstract

The Brazilian economy has more continuity than ruptures in the end of the pandemic as well over former Bolsonaro’s government closure. Positive economic indicators since 2021 were followed by a further slowdown at the end of 2022, keeping the pattern of weak growth moments in the midst of a near stagnation trend. The export of goods based on natural resources remains a positive factor as in the previous decades, though with the same problems of low leverage capacity of productivity diffusion to other sectors. The public sector faces great difficulties when trying to promote growth and modernization because of fiscal rigidity aggravated by mandatory expenses and varied resistance to cutting spending and redirecting expenses caused by conflicts that are hard to coordinate. After a brief presentation of the economic indicators at the end of 2022, the paper highlights three elements that condition the economic policy in the post-Covid Brazil: the rigidity of fiscal framework; export industry performance and deindustrialization; resumption of the foreign policy that will allow the country to benefit from the international scenario.