Ekonomske analize


Population 204,459 million
GDP 8 669 US$
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major macro economic indicators

  2014 2015  2016(f) 2017(f)
GDP growth (%) 0.5 -3.8 -3.6 0.4
Inflation (yearly average) (%) 6.3 9.0 8.7 4.4
Budget balance (% GDP) -6.0 -10.3 -9.0 -9.1
Current account balance (% GDP) -4.2 -3.3 -1.3 -1.4
Public debt (% GDP) 62.3 72.5 78.3 81.2


(f) Forecast


  • Improved institutional transparency following recent corruption scandals
  • Increasing active population
  • Varied and rich mineral resources and agricultural harvests
  • Advanced manufacturing industry: aeronautics, chemistry, pharmaceuticals, oil and gas industry engineering
  • Ability to withstand external shocks: creditor to outside world, substantial reserves


  • Shortages of qualified labour / inadequate education system
  • Infrastructure shortcoming (transport, energy)
  • Low level of investment
  • High cost of production (wages, energy, logistics, credit)
  • Public spending is high and inefficient
  • Scale of corruption and inequalities

Risk assessment

Slow recovery in activity in 2017

Brazil has experienced an unprecedented economic and political crisis, with two successive years of recession (2015–2016). In 2017, the economy is expected to gradually move into growth, which increased by 1% in the first quarter of 2017 (QoQ), for the first time in 2 years, largely based on the agriculture sector. The fall in inflation (3.6% YoY in May, a near 10-year low), progress on the budget reforms and the as yet slow recovery in economic activity should lead to a gradual reduction in interest rates: in order to promote borrowing and to reduce debt servicing costs, the Central Bank cut the Selic rate by 400 bp. since December 2016 (10.25% since May 31st). The reduction of macroeconomic imbalances and the recovering confidence within the industrial and services sectors should increase investments. Foreign trade should contribute to growth thanks to the vitality of exports (particularly primary) and the moderation of imports.

Despite the falling inflation, and the February 2017 measure allowing employees who resigned or have been dismissed before December 31, 2015, to draw on their Working Time Guarantee Fund (FGTS), household consumption is likely to continue suffering from the high level of unemployment, up one percentage point since the beginning of the year (13.6% in the first quarter).


The government wants to cut the public accounts deficit

The public deficit is likely to contract as the reforms being undertaken by the government of President Michel Temer are implemented. On coming to power in May 2016, the president announced a budget readjustment plan aimed at slowing the public spending growth. Several measures were suggested, in particular an amendment to the Constitution (PEC) intended to set a ceiling for increases in spending. The PEC was approved on the first vote in the Chamber of Deputies and in the Senate at the end of 2016. In 2017, the government’s political agenda focuses on reforming the retirement system, including longer working lives period with a minimum legal retirement age raised to 65. The reform of the labour code, including a relaxation in the working time, is also on the political agenda. However, their implementation will depend on the political situation. In the shorter term, the recovery in economic activity, slow as it may be, should help the government stop the decline in its revenues resulting from the economic contraction. All of these initiatives are aimed at reducing public deficit and, consequently, slow the growth in the public debt. Indeed, the speed of the public debt growth is a cause of concern and is costly, notably in terms of external creditworthiness. In May 2017, Standard & Poor’s downgraded it into junk territory, due to political risks. The risk associated with the external public debt is however limited (75% of the debt is held by residents) and the level of the currency reserves (19% of GDP) limit the danger of a currency crisis. The Dollar appreciation could however weigh on the réal exchange rate during the year, despite a gradual re-emergence of confidence in the country among investors.

In terms of foreign trade, the current account has been in surplus in March, the first in almost 8 years, with an increase in exports above the increase in imports. Yet, the rise of the US dollar and the low level of household demand are likely to negatively affect imports. Exports should be backed by the vitality of the agricultural (most notably soya) and livestock sectors, as well as, to a lesser extent, exports of manufactured products which will benefit from the weakness of the réal and the gradual upturn in regional demand. This should also lead to an increase in exports of services (mainly transports) to neighbouring countries.


Michel Temer facing corruption scandals

Officially appointed Brazilian Head of State at the end of August 2016, following the impeachment of Dilma Rouseff, his predecessor, Michel Temer faces an investigation of the Supreme Court for passive bribery, obstruction of justice and participation in a criminal organization. Revelations of corruption related to the judicial operation "Lava Jato", involving a large number of legislators and ministers, could lead to the indictment of the president. Nevertheless, on June, 9th 2017, after 4 days of debate on the regularity of the 2014 campaign accounts, the Electoral Court voted 4 to 3 against the motion that would have terminated Temer’s mandate.

In economic terms, the president wants to adopt more orthodox policies and ones that are more favourable to business than those of his predecessors, with a focus on budget management. These conventional policy measures (reforms to pensions and the labour laws) are however likely to weaken the already extremely shaky popularity of the government, and could be thwarted by the several corruption cases.

The foreign policy is expected to focus on building the country’s exports and on its strategic partnerships with Argentina, China and the United States.

Last update: June 2017



Bills of exchange (letra de câmbio) and, to a lesser extent, promissory notes (nota promissória) are the most common form of payment used in local commercial transactions. The validity of either instrument requires a certain degree of formalism in their issuance.


The use of cheques is relatively commonplace – often post-dated in practice and thus transformed into credit payment instruments – and their issuance requires comparable formalism.


Although the use of the above credit payment instruments for international settlements is not advisable, they nonetheless represent, an effective means of pressure in case of default, constituting an extra-legal enforcement title that provides creditors with privileged access to enforcement proceedings.


Theduplicata mercantil, a specific payment instrument, is a copy of the original invoice presented by the supplier to the customer within 30 days for acceptance and signature. It can then circulate as an enforceable credit instrument.


Bank transfers, sometimes guaranteed by a standby letter of credit, are also commonly used for payments in domestic and foreign transactions. They offer relatively flexible settlement processing, particularly via the SWIFT electronic network, to which most major Brazilian banks are connected.


For transfers of large sums, various highly automated interbank transfer systems are available, e.g. since April 2002, the STR real time Interbank Fund Transfer System (Sistema de Transferência de Reservas) managed by Banco Central do Brasil or the RSFN / National Financial System Network (Rede do Sistema Financeiro Nacional) linking various financial operators in Brazil in real time.


Debt collection

Amicable Phase

Creditors begin this phase by attempting to contact their debtors via telephone and email. If unsuccessful, creditors must then make a final demand by a registered letter with recorded delivery, requesting that the debtor pay the outstanding principal increased by past-due interest as stipulated in the transaction agreement. In the absence of an interest-rate clause, the civil code stipulates use of the penalty interest rate imposed on tax payments, which is 1% per month past due.


When creditors are unable to reach their debtors by phone and/or email, a search of the company’s contacts, partner businesses, and owners is conducted, in order to establish contact and enter into a settlement negotiation. If there is still no contact, this leads to an investigation of assets, an on-site visit, and an analysis of the debtor’s financial situation so as to ascertain the feasibility of taking legal action. Considering the slow pace and the cost of legal proceedings, it is always advisable to negotiate directly with defaulting debtors where possible, and attempt to settle on an amicable basis, taking into consideration that a repayment plan may last for up to two years. If amicable settlement negotiation is unsuccessful, creditors may attempt to reclaim the money owed via the Brazilian judicial system.


Legal proceedings

The legal system comprises two types of jurisdiction. The first of these is at the state level. Each Brazilian state (26 states, plus the Distrito Federal of Brasilia), notably including a Court of Justice (Tribunal de Justiça) whose judgments can be appealed at the state level. Legal costs vary from state to state.


The second type of jurisdiction involves the Federal Courts. There are five regional Federal Courts (Tribunais Regionais Federais,TRF), each with its own geographic competence encompassing several States.


For recourse on non-constitutional questions, TRF judgments can be appealed to the highest court of law, the Superior Tribunal de Justiça (STJ) located in Brasilia.


Brazilian law provides a wide range of legal measures to be used in defence of the rights of creditor against debtor, and provides also a large number of appeals to debtor.


Monitory Action

The ação monitóriais a special procedure that can be filed by any creditor who holds either a non-enforceable written proof, or any proof that is considered as an extrajudicial instrument recognized by the law as enforceable (even if it does not comply with all the legal requirements).


If the debtor’s obligation is deemed certain, liquid and eligible, the Municipal Courts usually render payment orders within fifteen days. If the debtor fails to comply within three days, the order becomes enforceable. In cases of appeal, the creditor has to commence formal ordinary legal action. The difference between this procedure and the Enforcement Proceeding is in the legal requirements and in the possibility of questioning the merit of the obligational relationship by the debtor over the course of the suit.


The ação monitória is slower than a regular Enforcement Proceeding: if the debtor presents an objection in the court, the merits of the commercial relation will be thoroughly discussed in the same fashion as a Standard Lawsuit. The estimated period of this lawsuit is on average two years.


Ordinary proceedings

are presided over by an interrogating judge (inquisitorial procedure), and require a scrupulous examination of evidence submitted by each party in conjunction with study of any expert testimony. The creditor must serve the debtor with a registered Writ of Summons, which the debtor must answer within fifteen days of receipt. The initial proceedings encompass an investigation phase and an examination phase. The final step of the process is the main hearing, during which the respective parties are heard. After this, a judgement is made by the court. The tribunal may render a default judgment if a duly served writ is left unanswered. It takes two to three years to obtain an enforceable judgment in first instance. 

Enforcement Proceeding

Of a Court decision

A final judgment is normally automatically enforced by Brazilian Courts. Since the reforms in 2005 and 2006, attachment of the debtor’s assets is possible if the latter fails to obey a final order within three days. In practice, execution can prove difficult, as there are very few methods for tracing assets in Brazil.


Foreign awards can be enforced if they meet certain conditions:

  • The homologation has to be concluded by the Superior Court to be enforced in Brazil
  • The parties have be notified
  • The award has to comply with all the requirements for enforcement (such as being translated from Portuguese by a public sworn translator).
Of an extra judicial instrument

The enforcement of extrajudicial instruments is a legal type of enforcement granted to the creditor in order to allow him to claim his rights against the debtor. This is the most direct and effective court vehicle to recover credits in Brazil. This lawsuit does not require prior guarantees from foreign creditors (as the bond in the monitory suit for example).


Moreover, Brazilian legislation renders some documents enforceable. These are separated in two main categories:

  • Legal enforcement titles, including judgments made by a local Court recognizing the existence of a contractual obligation, and court-approved conciliations and arbitral awards
  • Extralegal enforcement titles, such as bills of exchange, invoices, promissory notes, duplicata mercantil, cheques, official documents signed by the debtor, private agreements signed by debtor, creditor and two witnesses (obligatory) – as an acknowledgement of debt, secured agreements, and so on
    • It is obligatory to submit the original versions of these documents – copies are not accepted by the court

On average and within the main states, it takes a year for a judgement to be made following the initiation of legal proceedings.


Insolvency proceedings

Out of Court restructuring

Debtor can negotiate a restructuring plan informally with their creditors. The plan must represent a minimum of 60% of the total debt amount. This plan must be approved by the court.


Judicial Restructuring Procedure

The objective of this procedure is to help companies overcome financial difficulties and to preserve the company, its employees and creditors’ interests, with the goal of leaving it able to continue business once the procedure is completed.


The principal  stages of this lawsuit are as follows:

  • Debtors make a restructure to the request to the court, or request the conversion of a liquidation request to the court from their creditor(s)
  • If the plan is accepted by the court, debtors typically have typically 60 days (though this period is not  necessarily mandatory) to present a list with all debts from creditors, and a payment plan
  • A judge schedules two creditors’ meetings, with the second only occurring if the first one does not take place. During these meetings, the proposed plan must be accepted by a majority of creditors
  • Payments start as decided in the approved plan.

The estimated period of this lawsuit is between 5 and 20 years



The objective of the liquidation process is to collect all of the incomes of debtors who are declared bankrupt. The principal stages of liquidation are as follows:

  • Liquidation can be requested by either debtors (auto-falência), or any of their creditors if the debt totals more than 40 times the minimum wage
  • The initiating party must prove the existence of a net obligation, overdue and defaulted by presenting protested enforceable title (special protest – personal notice of debtor);
  • Upon analysis of a debtor’s financial situation, the judge can decide that the company must be liquidated
  • All of the company´s assets have to be sold and the obtained amount is shared equally between creditors, respecting eventual privileges.

The estimated period of this lawsuit is between 7 and 20 years

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