After contracting 4.1 percent in
2020, economic activity in Brazil increased substantially in
2021. Vaccination has accelerated, and the adult population
is likely to be covered in late 2021. A sluggish labor
market rebound, coupled with high unemployment and low
participation rates will likely increase poverty in 2021.
Raising fiscal concerns contribute to increasing long-term
yields, while the tightening of monetary policy to contain
the rampant inflation may undermine growth in 2022.