GDP growth in Brazil after the liberalising reforms

The Brazilian economy implemented the trade and financial liberalisation reforms in the first half of the 1990s as a new development strategy. Since then, Brazilian GDP has been unstable and much lower compared to the previous period. Despite this, there was a short period of relatively higher economic growth rate from 2004 to 2008, but the Brazilian economic growth decelerated after 2011; the country entered a recession between 2014 and 2016, and then in a stagnation period from 2017 onwards. The aim of this article is to analyse the Brazilian economic performance after the liberalising reforms and evaluate the reasons the Brazilian economy decelerated after 2010. To do so, we consider the importance of manufacturing production to a country's economic performance and analyse this relationship for the specific case of Brazil, checking the contribution of the manufacturing production growth to the country's GDP growth in circumstances of increases and decreases in GDP growth. To complement this analysis, we also evaluate the existence of increasing returns to scale. The results show that manufacturing production growth is still important for the Brazilian economic performance, especially to explain the moments when the country's GDP decreases.