Brazil

Continental federalism. Brazil's 1988 Constitution gives power to the Union, states, the Federal District, and municipalities. Policy shows up nationally in headline form and locally in execution, with 26 states, the Federal District, and 5,571 municipalities sharing administrative responsibility for education, health, policing, and infrastructure ^S5,S7.

Commodity and domestic-demand engine. Agriculture, mining, oil, services, and household consumption move the cycle. IBGE's 2025 GDP release shows agriculture up sharply while services kept the expansion broad. Soybean and corn exports, iron-ore shipments from Carajas and Minas Gerais, pre-salt offshore oil, and the Sao Paulo industrial belt together set Brazil's external earnings ^S1.

Inflation memory. Brazil's macro institutions still carry the lesson of past high inflation. The central bank's inflation-targeting regime and the Selic rate sit close to every debate on credit, mortgages, exchange rates, and public debt. The Real Plan of 1994 broke chronic indexation, and the 1999 move to a free-floating exchange rate paired with explicit inflation targets has anchored expectations through several political cycles ^S4,S8.

Fiscal pressure. BCB fiscal statistics show gross debt near four fifths of GDP. That debt stock makes the interest bill a political and macro constraint even when primary balances improve. The constitutional spending floors for health and education, the indexation of pensions and minimum wage, and the structure of federal transfers to states constrain the discretionary budget in normal times and tighten further when real rates rise ^S6,S7.

Inequality and informality. The World Bank and OECD stress that Brazil's productivity gap is tied to schooling, infrastructure, taxes, poverty, gender, race, informality, and the level of investment. The Gini coefficient on income remains above 0.50, among the highest in the G20, and one in three workers is in informal employment that sits outside full social-security coverage ^S10,S11.