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Brazil The significant GDP per capita gap to the upper half of OECD countries has widened in recent years, mainly due to comparatively weak labour productivity performance and low employment rates. Inequality remains high and progress in reducing it has slowed down. Greenhouse gas emissions are well below the OECD average in per capita terms. Some progress has been made in reducing trade barriers, by limiting local content requirements in the oil and gas sector. An education reform has given schools more flexibility to adapt to students’ needs. A new central agency has been tasked with prioritising and monitoring infrastructure projects and a reduction in subsidised lending will enhance the scope for private participation in infrastructure financing. A more educated workforce, better infrastructure and less tax distortions would support productivity improvements. Lowering trade barriers remains a priority for Brazil to increase exposure to international competition and strengthen incentives for productivity improvements. To reconcile the need for further reductions in income inequality with diminishing fiscal space, social expenditure should focus more on the most efficient policy instruments, particularly conditional cash transfers, at the expense of less efficient instruments. This would accelerate the decline of income inequality without increasing spending. Growth performance, inequality and environment indicators: Brazil A. Growth Average annual growth rates (%) GDP per capita Labour utilisation of which: Labour force participation rate Employment rate1 Employment coefficient2 Labour productivity of which: Capital deepening Total factor productivity Dependency ratio
2012-18 -1.0 -0.8 0.1 -0.9 0.0 -0.7 0.2 -0.8 0.4
Level
Annual variation (percentage points)
2017 53.3 (31.7)*
2013-17 0.1 (0)*
-50
3.2 (7.6)*
0 (0)*
-60
2015 6 (12.3)* 0.4 (0.3)* 2.5
Average of levels 2010-2012-2015 6.2 (12.8)* 0.4 (0.4)* 2.6
B. Inequality and environment
Gini coefficient3 Share of national disposable income held by the poorest 20%
GHG emissions per capita4 (tonnes of CO2 equivalent) GHG emissions per unit of GDP4 (kg of CO2 equivalent per USD) Share in global GHG emissions4 (%) * OECD simple average (weighted average for emissions data)
C. Gaps in GDP per capita and productivity have widened
2002-08 2.9 0.0 -0.6 0.6 0.0 2.3 -0.5 2.8 0.6
Gap to the upper half of OECD countries5 Per cent 0 -10 -20 -30 -40
-70 GDP per capita
GDP per employee
-80
Source: Panel A: OECD, Economic Outlook Database; Panel B: OECD, Income Distribution and National Accounts Databases and World Bank, World Development Indicators (WDI) Database; International Energy Agency (IEA), Energy Database; Panel C: OECD, Economic Outlook and Productivity Databases. StatLink 2 https://doi.org/10.1787/888933954686