What does Brazil need to do to become a developed country?

Brazil has the conditions to become a developed country, but it needs to overcome a problem that goes beyond governments, taxes, or public debt: we have a massive economy and we still produce relatively little wealth per inhabitant.

The country brings together important advantages: mineral resources, oil, arable land, water, energy, a consumer market, agro-industrial capacity, and a favorable geographic position. These advantages, however, do not automatically transform into prosperity. Countries with few natural resources, such as Japan and South Korea, managed to develop by investing in productivity, technology, education, infrastructure, and institutions.

My proposal for this conversation is to look at the problems, the choices, and the results we need to pursue in the horizon from 2027 to 2050. Moving beyond polarization does not mean avoiding disagreements. It means discussing a growth agenda with criteria, recognizing the costs of each choice, and thinking beyond a single term in office.

1. The diagnosis: the central problem is productivity

Brazilian GDP totaled R$ 12.7 trillion in 2025, with real growth of 2.3%. GDP per inhabitant stood at R$ 59,687.49 and the investment rate was 16.8% of GDP. These are complementary indicators: the first measures total production; the others help observe average income and expansion capacity. Source: IBGE, National Accounts of 2025.

Using the World Bank Atlas method, Brazil Gross National Income (GNI) per capita stood at US$ 10,550 in 2025, keeping the country in the upper-middle-income group. In the fiscal year 2027 classification, the high-income threshold begins at US$ 14,375. Source: World Bank, WDI, and FY2027 income classification.

Regarding public accounts, it is essential to separate monthly observation, annual projection, and methodology: the general government gross debt reached 82.9% of GDP according to the Central Bank methodology (observation in August 2026, about R$ 11.1 trillion), compared to 93.3% of GDP closed in 2025 and an annual projection of 97.8% of GDP for 2026 under the IMF methodology (IMF Country Report No. 26/191), which includes government bonds in the Central Bank portfolio. Meanwhile, R$ 1.18 trillion (R$ 1,182.2 billion over 12 months in the BCB fiscal note of 09/30/2026), equivalent to 8.86% of GDP, measures nominal interest accrued on an accrual basis (including the result of foreign exchange swap operations), which does not entirely equate to an immediate cash payment in the same fiscal year. Source: Central Bank, Fiscal Statistics of 09/30/2026.

Meanwhile, the National Treasury preliminary estimate for the general government gross tax burden in 2025 was 32.40% of GDP. Source: National Treasury.

These numbers show that the Brazilian challenge requires acting simultaneously on the sustainability of public accounts, the capacity to invest, and labor productivity.

2. Fiscal balance: recovering the capacity to invest

Public debt is not a problem merely because of its size, but because of the cost it imposes on the entire economy. When the State appropriates nearly 9% of GDP per year in nominal interest on an accrual basis, less room remains for investment and credit becomes more expensive for those who produce.

I do not see a sufficient solution in cutting any expense across the board or in increasing taxes on those who already work and enterprise. In the July 2026 Article IV consultation (IMF Country Report No. 26/191), the IMF estimated that putting Brazilian debt on a firm downward trajectory would require gradually raising the primary balance to about 1.5% of GDP by 2029 and 2.5% of GDP by 2031, combining better expenditure efficiency and the preservation of targeted social expenses. Source: IMF, July 2026 consultation.

A responsible fiscal agenda includes:

• Reviewing mandatory expenses and automatic indexation mechanisms, with predictable transition rules.
• Assessing subsidies, tax benefits, and tax expenditures with clear socioeconomic return targets.
• Improving the quality of public spending through periodic policy evaluation and more efficient government procurement.
• Reducing exceptions to fiscal rules and providing multi-year transparency to the budget.
• Avoiding turning extraordinary revenues, such as dividends and oil royalties, into permanent expenses without a sustainable source.

A more reliable fiscal trajectory helps reduce the risk premium and the cost of financing, allowing capital to migrate from debt roll-over to productive investment.

3. Productivity and business environment

The economic center of Brazilian transformation lies in increasing the value generated per worker.

Imagine two factories with equally dedicated workers. In the first one, energy fluctuates, freight takes too long, machinery financing is prohibitive, and the tax department spends thousands of hours interpreting rules. In the second one, logistics are predictable, long-term credit works, and taxation is simple. The second factory produces much more per worked hour.

The OECD report on Brazil in 2026 highlights regulatory barriers, low competition in key sectors, infrastructure bottlenecks, and educational gaps as direct obstacles to growth. Source: OECD, Foundations for Growth and Competitiveness 2026.

To unlock productivity and make life easier for those who enterprise, we need to:

• Conclude with discipline the transition of the consumption tax reform (scheduled until 2033), avoiding multiplying special regimes that recreate complexity.
• Simplify the opening, licensing, and closing of companies, reducing the bureaucratic cost for small and medium businesses.
• Increase legal certainty and reduce tax, labor, and regulatory litigation.
• Expand competition, gradual trade openness, and access to machinery, software, and technology.
• Strengthen the capital market and long-term credit for productive investments.

4. Turning natural advantages into added value

Brazil has already built excellence in sectors such as tropical agribusiness, deep-water exploration, and clean electricity generation. In 2025, renewable sources accounted for 86.8% of the Brazilian electricity matrix (a concept distinct from the total energy matrix, which also includes transportation and industrial fuels). Source: EPE, National Energy Balance 2026, base year 2025.

The next step is to use these natural advantages as a platform for chains with higher technological value:

This transformation is not achieved by banning exports or creating inefficient market reserves. It is achieved with competitive infrastructure, regulatory security, technical qualification, and partnerships between universities and companies.

5. Education, science, and technical training as economic policy

In PISA 2025, only 28% of 15-year-old Brazilian students reached at least level 2 in mathematics, considered the basic proficiency threshold, compared to 65% in the OECD average. Source: OECD, note on Brazil in PISA 2025.

No country sustains high salaries and a sophisticated industry without a solid foundation in reading, mathematics, sciences, and technical training. Education needs to be treated as a state economic policy:

• Prioritize early childhood, literacy at the right age, and mastery of mathematics and reading in elementary school.
• Value the teaching career with practical training, mentoring, and clear learning goals per school and municipality.
• Expand technical and vocational high school education connected to the productive vocations of each region.
• Bring universities, research centers, and companies closer together to transform science into patents, products, and productivity gains.

The criterion for success cannot be just the percentage of the budget spent, but rather how much students effectively learn.

6. Infrastructure, sanitation, security, and institutions

Macroeconomic stability is not enough when logistical costs, the lack of sanitation, and insecurity hinder the daily lives of families and businesses.

According to the 2024 edition (base year 2023) of the official Sewage Disposal and Water Supply reports from SINISA (published by the Ministry of Cities), the country records 59.7% of the total population served by a sewage collection network (61.6% in the segment of urban households served by a collection network) and only 49.4% of the generated sewage treated, while water supply network coverage reaches 83.1% of the total population. Source: Ministry of Cities, SINISA 2024 edition (base year 2023).

In public safety, the 2026 Violence Atlas (IPEA/FBSP) recorded a rate of 20.1 homicides per 100,000 inhabitants in 2024, the lowest rate in the recent series, but still well above the standard of developed countries. Source: IPEA, Atlas da Violência 2026.

To change this scenario in practice:

• Gradually raise the investment rate from the current 16.8% of GDP to the range of 22% to 25% of GDP in the next decade, combining well-modelled concessions, private capital, and public investment in high-return projects.
• Expand railways, ports, highways, agricultural storage, electrical transmission, and digital connectivity.
• Meet the targets for the universalization of drinking water and sewage collection and treatment, reducing diseases and increasing school and professional productivity.
• Fight organized crime with financial intelligence, integration between police forces, territorial control, and swift justice.

7. How long until Brazil can get there?

There is no guaranteed date for a country to become developed. The pace depends on the quality and continuity of public and private choices over several administrations.

As an illustrative planning scenario, we can divide this journey into three horizons:

Conclusion: where to begin

My priority would be to combine four simultaneous fronts: sustainable public accounts, productivity, infrastructure, and education. Advancing in just one while the others fall behind will not produce the leap that the country needs.

Brazil does not need to choose between recognizing its wealth and facing its structural problems. It needs to use the strength of its resources to finance and build a more productive, fair, and safe country.

A developed country is not just a country rich in natural resources: it is a country that transforms its potential into income, opportunities, and quality of life for the population.

In your opinion, where should Brazil begin?

Continue deepening your knowledge: read also Paths to Brazilian development (2026 to 2055): the synthesis of the 5 real levers and South Korea vs. Brazil: how to beat the middle income trap. Also explore the Brazil 2050 Agenda with interactive simulator and the Brasilia Arcade.

Official sources and references

1. IBGE - Quarterly National Accounts (4th quarter of 2025): GDP of R$ 12.7 trillion, growth of 2.3%, GDP per capita of R$ 59,687.49, and investment rate of 16.8% of GDP.
2. Central Bank of Brazil - Fiscal Statistics (published on 09/30/2026, observation in August 2026): General Government Gross Debt at 82.9% of GDP (R$ 11.1 trillion) and nominal interest accrued on a competence basis accumulated over 12 months of R$ 1,182.2 billion (R$ 1.18 trillion, or 8.86% of GDP, including currency swaps).
3. National Treasury - Preliminary estimate of the General Government Gross Tax Burden in 2025: 32.40% of GDP (OECD in 2024: 34.1% of GDP).
4. International Monetary Fund (IMF) - 2026 Article IV Consultation with Brazil (July 2026, IMF Country Report No. 26/191): gross debt under the IMF methodology at 93.3% of GDP ending in 2025 and annual projection of 97.8% of GDP for 2026, in addition to a primary surplus scenario of 1.5% of GDP by 2029 and 2.5% by 2031.
5. World Bank - World Development Indicators and FY2027 classification: Brazil's GNI per capita (Atlas method) at US$ 10,550 in 2025; high-income threshold above US$ 14,375.
6. OECD - PISA 2025 Country Note: Brazil (September 2026) and Foundations for Growth and Competitiveness 2026.
7. Energy Research Office (EPE) - Synthesis Report of the 2026 National Energy Balance (base year 2025): 86.8% of renewable sources in the Brazilian electricity matrix.
8. Ministry of Cities / SINISA - National Information System on Basic Sanitation, Sewage, and Water Supply, 2024 edition (base year 2023): 59.7% of the total population served with a sewage collection network (61.6% of urban households served by a collection network), 49.4% of the generated sewage treated, and 83.1% of the total population served with a water supply network.
9. IPEA / Brazilian Public Security Forum - Atlas of Violence 2026 (2024 data).