Economic studies


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

  2020 2021 2022 (e) 2023 (p)
GDP growth (%) -3.3 5.0 2.9 0.7
Inflation (yearly average, %) 3.2 8.3 9.3 5.5
Budget balance (% GDP) -13.3 -4.3 -5.2 -8.5
Current account balance (% GDP) -1.9 -2.8 -3.0 -2.5
Public debt (% GDP) 86.9 78.3 74.0 77.5

(e): Estimate (f): Forecast


  • Varied mineral resources and agricultural harvests
  • Large population (estimated at 212.6 million)
  • Well-diversified industry
  • Strong foreign exchange reserves
  • Net creditor in foreign currency


  • Sensitive fiscal position
  • Infrastructure bottlenecks
  • Low level of investment (roughly 19% of GDP)
  • High costs of production (wages, energy, logistics, credit) that harm competitiveness
  • Shortage of qualified labour, inadequate education system
  • Criticized environmental policy (permissive with deforestation)

Risk assessment

Economy to strongly decelerate in 2022

In 2022, the economy is set to decelerate substantially, mostly driven by base effects and the lagged impact of the aggressive monetary policy tightening, which should be felt more sorely in H2 2022 (policy rate stood at 13.75% per year in August 2022, up from a minimum of 2% up to March 2021). While the unemployment rate has receded to below the pre-pandemic level (9.3% in June 2022, from a peak of 14.9% in September 2020 and an average rate of 12% in 2019), real wage growth (-5% year-on-year in June 2022) has for now failed to follow suit (affected by sticky high inflation). In fact, consumer prices have probably peaked in June 2022, but it is not expected to converge towards the tolerance range on the central bank´s target before 2024 (when the annual objective will be lowered to 3% with 1.5 p.p. standard deviation).  As such, household consumption (61% of GDP), will report mild growth in 2022, despite the income reinforcement measures implemented by the government (the most notable being the temporary increase of the welfare program Auxílio Brasil, adding up to 0.3% GDP). In addition, gross fixed investments are expected to slightly contract, following their strong showing last year, as global credit conditions are tightening and companies are getting more cautious with the proximity of uncertain local presidential elections. Supportive commodity prices (accounting for 60% of foreign sales), will allow exports to grow, even as the global economy loses traction. Agricultural exports should expand despite the drought faced in the south of the country at the beginning of the year and the cost pressures faced by producers (mainly due to the sharp rise in fertilizer prices since the beginning of the war in Ukraine).


External and budget deficits to widen

The current account deficit should widen in 2022, driven by higher primary income and services deficits. The former (3.1% of GDP in 2021), will be widened by the rise in repatriated foreign investment income (amid favorable commodity prices and the normalization of activities previously hit by the COVID-19 pandemic). In addition, the services account (-1.1% of GDP) should also be affected by higher travel spending abroad (amid the lifting of COVID-19 related restrictions) and soaring freight costs. On the other hand, the goods trade surplus (2.2% of GDP) is expected to remain solid in 2022. Higher agriculture and mineral commodity prices will boost exports, and should offset the rise in imports driven by higher fuel and fertilizer prices. On the financing side, foreign direct investment (2.9% of GDP) will continue to cover comfortably the external shortfall. In 2022, FDI should continue to expand (albeit remaining below 2019 levels), driven by supportive commodity prices. Meanwhile, foreign currency reserves will remain robust (ensuring an import coverage of 16 months as of July 2022). Finally, total gross external debt (including intercompany loans and domestic fixed income securities held by non-residents) stood at 33% of GDP in May 2022, with the general government and central bank share representing 5.4% of GDP.

On the fiscal front, the budgetary imbalance (including interest payment) is set to deteriorate in 2022. On the one hand, the consolidated public sector is expected to again register a marginal primary surplus (before interest payment) in 2022. Tax revenues have surprised to the upside in the first half of 2022, driven by higher commodity prices (notably oil prices), high inflation and stronger than expected activity. Nonetheless, this windfall has been watered down by households support measures (higher Auxílio Brasil, vouchers for truckers and taxi drivers, subsidy for the transport of elderlies) and tax reductions, to smooth the impact of soaring food and energy prices. Some federal taxes on fuels were temporarily cut and a cap was introduced on state taxes on fuel, electricity, public transport and telecommunications. In addition, interest expenses will be higher this year, due to the sharp rise in the Selic policy rate and the inflationary pressures. As of June 2022, 32% of the government bonds were inflation-linked and 36% were paying a floating rate. Despite being significant, the gross public debt is mostly owed domestically (88%).


Political climate will remain tense as general elections approach

Brazil will hold presidential elections on 2 October 2022, with a possible runoff on 30 October 2022 if no candidate reaches an outright majority (the new term is set to start on 1st January 2023). During the vote, the country will also renew all State Governors, one-third of the 81 members of the Senate and all 513 members of the Lower House. Regarding the presidential race, the incumbent president Jair Bolsonaro from the right-wing Liberal party will run for re-election. However, polls have consistently shown him as the second frontrunner, with the former leftist president Luiz Inácio Lula da Silva (2003-2010) from the Labour party being in the lead . Among the main proposals defended by Lula are the repeal of the constitutional spending cap (which limits the growth in government expenditure to inflation) and a tax reform to simplify consumption taxes, in addition to taxing large fortunes. He also pledged to extend the temporary increase of the Auxílio Brasil to next year. As for the sate-owned oil company Petrobras, he defends that investments should be oriented towards energy security and national self-sufficiency in fuel. Overall, despite the campaign being very polarized, democratic institutions must guarantee reliable elections.










Last updated: September 2022



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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