Brazil’s GDP may rise 0.4% a year with OECD membership

RIO DE JANEIRO, BRAZIL – Brazil’s membership in the OECD (Organization for Economic Cooperation and Development) may increase the country’s GDP by 0.4%, according to a study by Ipea (Institute for Applied Economic Research) released on Friday, June 3.

According to the institute, the percentage of growth is equivalent to R$28 billion (US$5.9 billion) per year, based on the Brazilian Gross Domestic Product for 2021.

Ipea pointed out that, among the countries that are not members of the OECD, Brazil has the “highest degree of adhesion to the normative instruments and participates in the largest number of the organization’s committees.

Previously, the country has already adopted more than 100 of the 253 OECD legal terms. Part of those still missing will require reforms in economic systems, such as taxation.

According to the institute, “Brazil can benefit significantly from joining the OECD since this participation can boost our country’s economic development by increasing the per capita income of Brazilians, increasing foreign investment, and bringing the country closer to the advanced economies.”

The document also cites a possible advance in corruption control indicators and regulatory quality as a benefit.

In the projection, Ipea considers the increase in the GDP of EU countries (European Union) when they joined the European block as a parameter.

The percentage of growth projected for Brazil corresponds to half of that observed, on average, among the countries that joined the EU.

BRAZIL’S ENTRY INTO THE OECD

Membership in the OECD is one of the priorities of the economic and foreign relations policies of the government of President Jair Bolsonaro (Liberal Party – PL). Joining the institution is seen as the main way for the country to adjust to international standards.

On January 25, 2022, the organization’s Council of Ministers approved the start of negotiations for Brazil’s full entry into the group. These discussions, however, should extend over three to five years.

Ministers Ciro Nogueira (Chief of Staff) and Paulo Guedes (Economy) travel to Paris this week to attend the annual meeting of the OECD Council, to be held June 8-10.

The delegation will discuss terms, conditions, and processes for Brazil’s access to the organization.

With information from Poder360