The Brazilian economy cooled from the second to the third quarter, this time with almost no surprises. If it doesn't grow at all in this last quarter, the GDP for 2023 will have increased by 3%, the same pace as in 2022.
The country has not grown by 3% or more for two consecutive years since 2011 (excluding the 2021 recovery from the pandemic). However, per capita income (GDP) is still lower than in 2013 and is expected to remain so until 2025. We have gone through a historical disaster.
More importantly, it is crucial to know where the impulses for growth in 2024 may come from. For now, they seem weak or difficult to discern in the fog of uncertainty.
In summary, the GDP of 2023 advanced due to improvements, still partly misunderstood, in the world of work and exports of commodities, along with a considerable increase in government spending, which is now unsustainable.
Brazil will grow in 2023 because it continued to increase the number of people working, with some rise in average wages, still the biggest surprise of the year.
However, in 2024, there will be little increase in social benefits spending. There won't be another significant drop in inflation. The wage bill is still growing, but at a slower pace. Lower interest rates in 2024 might do something for bank credit.
It's challenging to see where a significant increase in employment will come from.