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www.oecd.org/eco/surveys/economic-survey-brazil.htm
OECD
OECD Economics
2015 OECD ECONOMIC
SURVEY OF BRAZIL
Reigniting inc...
Poverty and inequality have declined
2
Poverty and Gini coefficient
1995-2013
Source: IBGE; World Bank.
0.46
0.48
0.5
0.52...
Health outcomes have improved
3
Life expectancy at birth
Source: OECD Health Statistics 2015, http://dx.doi.org/10.1787/he...
Productivity has been weak
4
Labour productivity, 2000=100
Source: Feenstra, Robert C., Robert Inklaar and Marcel P. Timme...
The economy is in recession
5
Quarterly GDP growth at seasonally-adjusted annual rates
Source: OECD Economic Outlook Datab...
The currency has depreciated
6
Source : Central Bank.
0
20
40
60
80
100
120
140
160
180
200
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0....
Policies to restore confidence
7
The fiscal position has deteriorated
8
Primary expenditures and tax revenues
Source: Central Bank; National Treasury.
25
2...
Gross debt is rising
9
Possible debt trajectories
Source: OECD calculations.
 Implement the fiscal adjustment in line wit...
Inflation is high
10
Source : Central Bank.
0
2
4
6
8
10
12
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Headlin...
The efficiency of monetary policy could be
improved
11
Monetary policy rate and directed lending rate
Source: Central Bank...
Policies to boost industrial performance
12
Labour productivity in manufacturing is low
13
0
20
40
60
80
100
120
140
160
180
0
20
40
60
80
100
120
140
160
180
IDN
COL...
Tax compliance costs are high
14
Hours required to prepare taxes
For a benchmark manufacturing company, 2014
Source: World...
Brazil trades little with the rest of the world
15
Trade in % of GDP (average 2010-2013)
Source: OECD-WTO Trade in Value A...
Regulatory barriers to entrepreneurship are high
16
Indicator scaled from 0 (least restrictive) to 6 (most restrictive)
So...
Brazil’s infrastructure is poor compared to its
major trading partners
17
Normalised to 1 for the value of Brazil
Source: ...
Skills are still weak
18
Percentage of students in secondary education enrolled in
vocational programmes
Source: UNESCO In...
Policies to improve public health services
19
Medical staff is in short supply
20
Practising doctors Practising nurses
 Train more doctors and nurses
 Implement targe...
Regional disparities are large
21
Registered doctors per 1000 inhabitants
Source: Conselho Federal de Medicina (2013): Pes...
Enhance spending efficiency in healthcare
22
Potential gains in health-adjusted life expectancy
through efficiency improve...
Improving equity in health expenditures is key
23
Per capita health expenditures, USD at purchasing power parities
Source:...
Great
Good
Regular
Bad
Very bad
N/A
The quality of care could be improved
24
Perceived quality of public healthcare servic...
Further recommendations on healthcare
25
 Develop clinical guidelines for the choice of cost-effective medicines
 Set re...
SUMMARY: Main Findings
o The fiscal position has deteriorated. Additional long-term fiscal
challenges will arise from popu...
Key Recommendations
o Implement the fiscal adjustment in line with medium-term objectives,
including a stabilisation of gr...
More Information…
www.oecd.org/eco/surveys/economic-survey-brazil.htm
OECD
OECD Economics
Disclaimers:
The statistical dat...
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Reigniting inclusive-growth-oecd-economic-survey-brazil-2015

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Presentation of OECD Economic Survey of Brazil 2015

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Reigniting inclusive-growth-oecd-economic-survey-brazil-2015

  1. 1. www.oecd.org/eco/surveys/economic-survey-brazil.htm OECD OECD Economics 2015 OECD ECONOMIC SURVEY OF BRAZIL Reigniting inclusive growth Brasília, 4 November 2015
  2. 2. Poverty and inequality have declined 2 Poverty and Gini coefficient 1995-2013 Source: IBGE; World Bank. 0.46 0.48 0.5 0.52 0.54 0.56 0.58 0.6 0 5 10 15 20 25 30 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Absolute poverty (below USD 2 per day, left scale) Gini Index (right scale)
  3. 3. Health outcomes have improved 3 Life expectancy at birth Source: OECD Health Statistics 2015, http://dx.doi.org/10.1787/health-data-en. 40 50 60 70 80 90 JPN ESP CHE ITA FRA KOR CAN GBR DEU PRT OECD CRI CHL USA POL TUR CHN COL BRAZIL MEX IDN RUS IND ZAF Years 2013 1970
  4. 4. Productivity has been weak 4 Labour productivity, 2000=100 Source: Feenstra, Robert C., Robert Inklaar and Marcel P. Timmer (2013), “The Next Generation of the Penn World Table” available for download at www.ggdc.net/pwt. 80 100 120 140 160 180 200 220 240 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 BRAZIL China India Mexico South Africa Thousands of USD / person employed, at purchasing power parities
  5. 5. The economy is in recession 5 Quarterly GDP growth at seasonally-adjusted annual rates Source: OECD Economic Outlook Database. -8 -6 -4 -2 0 2 4 6 8 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2
  6. 6. The currency has depreciated 6 Source : Central Bank. 0 20 40 60 80 100 120 140 160 180 200 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 USD/BRL exchange rate (left scale) Real effective exchange rate (right scale)
  7. 7. Policies to restore confidence 7
  8. 8. The fiscal position has deteriorated 8 Primary expenditures and tax revenues Source: Central Bank; National Treasury. 25 27 29 31 33 35 37 25 27 29 31 33 35 37 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Tax revenues (% of GDP) Primary expenditures (% of GDP)
  9. 9. Gross debt is rising 9 Possible debt trajectories Source: OECD calculations.  Implement the fiscal adjustment in line with medium term objectives, including to stabilise gross debt  Gradually raise the retirement age and index pensions to consumer prices rather than the minimum wage 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Current plans with primary results of 0.15% (2015), 0.7% (2016), 1.3% (2017) and 2.0% thereafter Scenario with primary surplus of 3% after 2018 Scenario with continuing transfers to public banks of 1.9% of GDP % of GDP % of GDP
  10. 10. Inflation is high 10 Source : Central Bank. 0 2 4 6 8 10 12 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Headline inflation YoY Core inflation YoY Inflation target Tolerance band  Establish fixed-term appointments for the Central Bank governor and the members of the Monetary Policy Committee
  11. 11. The efficiency of monetary policy could be improved 11 Monetary policy rate and directed lending rate Source: Central Bank.  Adjust the directed lending rate in line with the monetary policy rate 0 2 4 6 8 10 12 14 16 18 20 0 2 4 6 8 10 12 14 16 18 20 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Directed lending rate (TJLP) Monetary policy rate (Selic)
  12. 12. Policies to boost industrial performance 12
  13. 13. Labour productivity in manufacturing is low 13 0 20 40 60 80 100 120 140 160 180 0 20 40 60 80 100 120 140 160 180 IDN COL ECU BRAZIL THA VEN HRV MEX EST CHL MYS TUR HUN ZAF POL PRT HKG SVK CZE SVN GRC ARG ITA NZL AUS FRA KOR DEU GBR JPN SGP ISL AUT DNK BEL FIN NOR NLD USA SWE CHE in thousands of 2005 USD per employee
  14. 14. Tax compliance costs are high 14 Hours required to prepare taxes For a benchmark manufacturing company, 2014 Source: World Bank.  Consolidate indirect taxes into a value added tax with a broad base 0 500 1000 1500 2000 2500 3000 0 500 1000 1500 2000 2500 3000 LUX CHE IRL EST NOR FIN AUS GBR SWE NLD DNK CAN MYS FRA ISL NZL BEL CRI AUT ESP RUS USA KOR GRC PHL ZAF SVK DEU TUR ISR COL IND IDN SVN CHN THA ITA PRT HUN POL CHL PER URY JPN MEX PRY ARG CZE VEN BRAZIL
  15. 15. Brazil trades little with the rest of the world 15 Trade in % of GDP (average 2010-2013) Source: OECD-WTO Trade in Value Added (TiVA) – July 2015.  Lower tariffs and scale back local content requirements 0 20 40 60 80 100 120 140 160 180 200 0 20 40 60 80 100 120 140 160 180 200 BRAZIL USA ARG JPN COL AUS VEN IDN ITA TUR FRA NZL GRC ECU GBR ZAF MEX NOR CHL PRT FIN HRV DEU SWE POL DNK AUT ISL KOR CHE SVN CZE THA NLD MYS BEL HUN EST SVK Trade in % of GDP (average 2010-13)
  16. 16. Regulatory barriers to entrepreneurship are high 16 Indicator scaled from 0 (least restrictive) to 6 (most restrictive) Source: OECD Product Market Regulation Indicators, 2013, available at www.oecd.org/eco/pmr.  Streamline regulation and reduce barriers to entry 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 SVK NZL NLD ITA DNK AUT CAN PRT GBR RUS FIN CHE EST POL DEU JPN FRA AUS NOR HUN SWE LUX BEL SVN CZE KOR GRC IRL CHL ISL ESP ZAF MEX ISR TUR BRAZIL CHN IND
  17. 17. Brazil’s infrastructure is poor compared to its major trading partners 17 Normalised to 1 for the value of Brazil Source: World Economic Forum, World Bank, FIESP.  Improve the technical capacity and planning for infrastructure concessions  Elaborate more detailed tender packages prior to launching tender calls 0 2 4 6 8 10 12 14 Road density Rail density BRAZIL Major emerging trading partners Major trading partners 0 0.5 1 1.5 2 2.5 3 Road quality Rail quality Port quality
  18. 18. Skills are still weak 18 Percentage of students in secondary education enrolled in vocational programmes Source: UNESCO Institute for Statistics. Data for 2012.  Boost the participation in vocational training to alleviate skill shortages for technical workers 0 10 20 30 40 50 60 0 10 20 30 40 50 60 ZAF BRAZIL COL GBR KOR LCN JPN ARG NZL THA OECD HUN IRL MEX CRI RUS GRC ESP IDN DEU ISR EST FRA CHN ISL CHL TUR PRT DNK SWE NOR LUX FIN SVK CHE AUS SVN ITA CZE BEL AUT NLD
  19. 19. Policies to improve public health services 19
  20. 20. Medical staff is in short supply 20 Practising doctors Practising nurses  Train more doctors and nurses  Implement targets for expanding specialised medical services to reduce waiting times Source: OECD Health Statistics 2015. 0 1 2 3 4 5 6 RUS PRT² DEU CHE ITA ESP FRA¹ OECD GBR USA CAN¹ JPN POL KOR MEX CHL² BRAZIL COL TUR¹ CHN ZAF IND IDN Per 1 000 population 0 2 4 6 8 10 12 14 16 18 20 CHE DEU USA¹ JPN CAN FRA¹ OECD GBR RUS ITA¹ PRT¹ CHL² POL KOR ESP MEX CHN TUR¹ BRAZIL IND ZAF IDN COL Per 1 000 population
  21. 21. Regional disparities are large 21 Registered doctors per 1000 inhabitants Source: Conselho Federal de Medicina (2013): Pesquisa Demográfica Médica no Brasil.  Strengthen incentives to reduce geographic imbalances Doctors Doctors affiliated to SUS
  22. 22. Enhance spending efficiency in healthcare 22 Potential gains in health-adjusted life expectancy through efficiency improvements, at constant expenditure levels Source: OECD calculations based on World Bank and WHO data.  Enhance spending efficiency, including by  developing a more explicit definition of what is covered  wider use of performance indicators and incentive-based mechanisms  shifting the emphasis from hospital care towards primary care services 0 2 4 6 8 10 12 14 0 2 4 6 8 10 12 14 KOR JPN ITA ESP COL ISR CRI PRT THA GRC FRA CHL PER CHE AUT AUS BOL IDN URY NZL MEX VEN CHN PAN SWE BEL TUN DEU EST NLD ARG POL FIN NOR GBR DNK TUR USA BRAZIL IND RUS ZAF
  23. 23. Improving equity in health expenditures is key 23 Per capita health expenditures, USD at purchasing power parities Source: OECD Health Statistics 2015, http://dx.doi.org/10.1787/health-data-en; WHO Global Health Expenditure Database.  Gradually phase out the tax deductibility of private healthcare expenses to free more resources for the SUS  Raise funding for public healthcare 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 Brazilians with private health insurance Brazilians without private health insurance Brazil - average
  24. 24. Great Good Regular Bad Very bad N/A The quality of care could be improved 24 Perceived quality of public healthcare services Source: CNI, 2012.  Improve the collection of performance indicators and enhance the use of benchmarking and incentive-based mechanisms, including pay-for- performance schemes  Provide stronger incentives for accreditation of hospitals. Strengthen the licensing process, including enforcement mechanisms  Improve the coordination of healthcare services and the exchange of information by linking databases across healthcare providers Over 60% of respondents say “bad” or “very bad”
  25. 25. Further recommendations on healthcare 25  Develop clinical guidelines for the choice of cost-effective medicines  Set reference prices for all medicines  Define an exclusive list of reimbursed medicines  Strengthen the role of regional networks through stronger leadership of states  Improve the co-ordination and exchange of information by linking databases  Provide more long-term care services in the public healthcare system
  26. 26. SUMMARY: Main Findings o The fiscal position has deteriorated. Additional long-term fiscal challenges will arise from population ageing. o Inflation has risen above the tolerance band. o A fragmented system of indirect taxes causes high compliance costs. o High trade protection and weak competitive pressures hold back productivity. o Public healthcare services are facing severe capacity constraints and are unevenly distributed across the country. o Many healthcare services that are currently provided in hospitals could be provided more cost-efficiently in primary healthcare units and long- term care services. 26
  27. 27. Key Recommendations o Implement the fiscal adjustment in line with medium-term objectives, including a stabilisation of gross debt o Gradually raise the retirement age and index pensions to consumer prices o Consolidate indirect taxes into a value-added tax with a broad base o Lower tariffs and scale back local content requirements o Define clearly what is covered in public healthcare services. o Expand the use of performance indicators and incentive-based mechanisms in healthcare o Train more doctors and nurses and implement targets for expanding specialised medical services to reduce waiting times 27
  28. 28. More Information… www.oecd.org/eco/surveys/economic-survey-brazil.htm OECD OECD Economics Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 28

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