Itaú BBA - A new look into productivity in Brazil

Macro Vision

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A new look into productivity in Brazil

August 7, 2019

We estimate potential GDP growth between 1.5% and 2.0% in coming years.


For the version with all charts and tables, please open the attached pdf file

 

• Slow GDP growth in recent years has escalated concerns about productivity in Brazil, which declined during the 2015/16 recession and has not yet rebounded.

• This report indicates that productivity has been negatively affected by the growing share of informal workers in the labor market.

• As the economy recovers, the share of formal jobs will naturally increase, reviving productivity.

• This analysis reinforces our view that the weakness in economic activity stems more from lack of demand than by supply-side issues. Hence, we still see substantial room to provide monetary stimuli to demand.
 

Luka Barbosa
Alexandre Gomes da Cunha

Matheus Felipe Fuck


 

For the version with all charts and tables, please open the attached pdf file



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