Brazil has made remarkable social and economic progress in the past two decades, but must now overcome important challenges if it is to put its economy on a stronger, fairer, greener growth trajectory, according to two new reports from the OECD.

The Economic Survey says that Brazil is at a critical moment, as the fiscal situation is challenging, inflation is high and previous tailwinds from high commodity prices are fading. All of this is putting pressure on the wider economy, which is projected to contract by 3.1% this year and a further 1.2% in 2016. The Survey recommends Brazil move ahead with the planned fiscal adjustment, which will be critical for strengthening public finances, restoring market confidence and preparing for intense population ageing.

Brazil will also need to rein in the expansion of public expenditures, notably by making public spending more effective and reforming the pension system. Improved targeting of social benefits – spending more on the poor, and less on benefits for those who have successfully joined the middle class – could simultaneously reduce inequality while strengthening the public finances.

One chapter of the Survey commends progress in health care, but points out that inequalities in access and waiting times for some medical services remain. To further reduce these bottlenecks, Brazil will need to expand capacity, train more doctors and nurses and improve the efficiency of health spending. The current governance structure of the health system is complex, and more could be done to collect performance indicators, evaluate progress and improve coordination mechanisms.

Source: OECD

*Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and social well-being of people around the world.

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