Brazil's Economic Challenges and Labor Market Insights in 2025
Brazil faces economic growth and fiscal challenges in 2025, alongside notable labor market trends in the nonprofit sector.
- • Brazil fell from 10th to 11th largest economy globally and from 2nd to 32nd in GDP growth ranking.
- • Gross government debt is about 80% of GDP, restricting fiscal flexibility.
- • Economic growth is projected around 2% for 2025 and 2026, hampered by low productivity and structural issues.
- • Nonprofit foundations pay higher average salaries than companies, employing 5.1% of Brazil's workforce, with gender pay disparities present.
Key details
Brazil has slipped from the 10th to 11th largest economy globally, while its GDP growth ranking tumbled from 2nd to 32nd, according to data analyzed in 2025. This decline is attributed not only to external currency fluctuations but primarily to internal fiscal and structural challenges. The country's gross government debt has escalated to around 80% of GDP, limiting fiscal space and maintaining high real interest rates. This situation hinders private investment and complicates monetary policy efforts aimed at easing. Economists project a modest economic growth rate of about 2% annually for 2025 and 2026, a pace insufficient for Brazil’s economic convergence and sustained expansion.
Structural issues—including low accumulation of human capital, problems in education and health, and an unfavorable business environment—are key barriers to productivity and growth. Professor Alex Ferreira of USP highlights that without improvements in these areas, demand growth risks fostering inflationary pressures. Meanwhile, Brazil's per capita income ranking remains low, near 90th globally, trailing regional peers like Argentina and Chile.
Alongside these economic constraints, studies reveal that private foundations and non-profit associations have become significant actors in Brazil’s labor market. In 2023, these organizations paid higher average salaries (R$ 3,630.71) than corporate sectors (R$ 3,286.15) and employed 2.7 million people, representing 5.1% of the workforce. Despite this, women, who account for 68.9% of workers in these sectors, earn 19% less than men. These organizations play a vital socio-economic role by supplementing government services in health, education, and social assistance, underlining the multifaceted labor market dynamics in Brazil amid its broader economic struggles.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.
