Brazil’s GDP disappoints but tax burden is record’s third-quarter GDP disappointed analysts with 0.6% versus a market consensus of 1.2%.  revisions in GDP growth forecasts for both this year and 2013. 

Main surprises

Private consumption was up 0.9% but  investment decreased  (-2.0%) and government spending (+0.1%) came as the main surprises, according to ITAU BBA research. What did well? Agriculture sector with 2.5% while the industry did reasonably well: 1.1%. Service activity stood flat. 

Tax burden

And what is holding Brazil back? What about this:

More than a third of all that Brazil produced in 2011 went to pay taxes.
Source: Blog do Onyx

According to figures released by the Brazilian IRS, the tax burden last year accounted for 35.31% of the GDP, the highest percentage ever recorded! It is up 2% compared to 2010.  So far greater tax burden had been recorded in 2008, when the percentage reached 34.54%. As the figure  shows, every Brazilian works 4 months and 25 days for “government”s  (federal, state and city).


Published by Hildete Vodopives

Hildete de Moraes Vodopives is founder of Brazil Global and of the Harvard Strategists Group. She has a PhD in Economic History and advises companies and investment agencies in international business development.She served as Corporate Relations Director and later, on the board of the Brazilian Investment Analysts Association (APIMEC).

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