With the Brazilian economy slipping, Brazilian income should be stagnant next year. A projection by the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV) shows that the Gross Domestic Product (GDP) per capita – the sum of wealth produced by the country divided by its inhabitants – could remain stable (0.0%) in 2022, in BRL 36,512.
According to Silvia Mattos, coordinator of the Macro Bulletin at Ibre/FGV, the calculation takes into account a growth of 0.7% of GDP in 2022, discounting the population increase of the same magnitude (0.7%). “We forecast GDP growing because there are sectors with almost automatic growth, such as agriculture and cattle raising. But, discounted the high population, the variation is nil”, she says.
For this year 2021, calculations point to a growth of 3.8% in GDP per capita.
According to the Ibre/FGV, the peak of the Brazilian GDP per capita was reached in 2013, at R$39,575 (at 2020 price). Silvia says that, in a scenario classified as “good, very optimistic”, the per capita income of Brazilians would return to this level in 2028. For that to happen, it would be necessary for the Brazilian GDP per capita to grow at an average pace of 1.5 % per year over the next seven years.
“We only had such growth in the 2000s. It would take a favorable external shock and, internally, a vigorous cycle of reform. It’s a possible but optimistic scenario. If we consider what we actually grew in per capita GDP between 1981 and 2019, which was 0.7% per year, we will only reach the level of 2013 in 2034”, explains the coordinator of the Macro Bulletin.
In addition to the setback in the level of income in recent years, the wealth of Brazilians is known to be poorly distributed. IBGE data show that inequality measured by the Gini index worsened in 2018 and 2019. Last year, the indicator registered an improvement, which can be partially attributed to the payment of emergency aid throughout the year, reducing poverty levels.
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