Brazil has been hard hit by the COVID-19 pandemic, but it experienced one of the smallest contractions of gross domestic product (GDP) in the region. In 2020, GDP contracted by 4.1% annually. In 2020, poverty and extreme poverty (16.3% and 1.4%, respectively) based on the latest international comparable estimations, although high, were lower than the average in the Latin America and the Caribbean (LAC) region (30.9% and 10.0%).

Between March 2020 and May 2021 schools were fully closed for 38 weeks, compared to 26 weeks in LAC and 15 weeks across Organisation for Economic Co-operation and Development (OECD) countries. Before the pandemic, effective online learning was present in 35.0% of schools, compared to 54.1% in the OECD. Public expenditures on health represented 8.7% of GDP, higher than the LAC average (6.8%) and similar to the OECD average (8.8%). However, according to Gallup data, just 34.4% of people were satisfied with the public provision of health care in 2020, seven percentage points less than in 2009. This figure is lower than in LAC (48.2%) and the OECD (70.7%). The share of people who think that the government is corrupt increased by more than five percentage points in the last decade, reaching 71.0% in 2020. This figure is lower than in LAC (72.4%) but higher than in the OECD (58.8%).

Brazil responded rapidly to the COVID-19 crisis. The deployment of measures to protect the most vulnerable households, workers and enterprises aided significantly in limiting the deterioration of the economy. In 2020, Brazil created one of the largest cash transfer programmes in the world (Emergency Aid), while greatly extending both the existing conditional cash transfer programmes (Bolsa Familia Programme) and home visitation for early childhood development (Criança Feliz). Additionally, Brazil implemented a food acquisition programme (Programa de Adquisiçao de Alimentos) to encourage and sustain the production of family farmers, and it supported vulnerable populations through social assistance. Concerning workers and firms, Brazil implemented the largest income preservation and job-retention scheme ever deployed in the country (Emergency Employment and Income Maintenance Benefit). It particularly targeted small and medium-sized enterprises and allowed for contracts to be suspended instead of terminated, while workers received the equivalent of unemployment benefit.

Going forward, Brazil will follow a structural reform agenda that aims to recover fiscal balance, increase productivity and prepare workers and firms to face the challenges of the post-pandemic economy. Digital platforms now allow citizens to examine their labour situation and obtain unemployment insurance. Last, Brazil proposed major reforms, such as the civil service reform, to reduce payroll costs and improve quality of public services, and the tax reform, to decrease the complexities of the current taxation systems.

Brazil’s international co-operation projects give priority to enhancing the country’s competitiveness, with a focus on reforms of the current tax system, encouraging market competition and further opening the economy to foreign trade. Beyond LAC, Brazil participates in international immunisation schemes, such as the Vaccine Accelerator Project, and engages in the COVID-19 Vaccines Access (COVAX) initiative. Additionally, Brazil chairs the Biofuturo Platform, an international initiative aiming to promote a sustainable bioeconomy, including defining general economic recovery programmes post-COVID-19. Moreover, Brazil’s high-level co-operation strategies with the People’s Republic of China, India, Spain, the United Kingdom and the United States have allowed the country to acquire meaningful donations to deal with COVID-19, as well as to boost its vaccine production. Last, within the framework of the last phase (2020-21) of the EUROsociAL+ co-operation programme with the European Union, the country received support for the creation of new orientation services amid the pandemic. This included a series of communication actions to support vulnerable population through the Accounting and Tax Support Nucleus.


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