Brazil's structural issues hinder competitiveness, says expert

Brazil fell seven positions in the 2026 World Competitiveness Ranking and now occupies 65th place among 70 economies evaluated, recording its worst performance in recent years. The result places the country among the bottom nine, alongside economies such as Nigeria, Mongolia and Venezuela.

In an interview with CNN Money, Carla Beni, counselor at Corecon-SP, stated that the drop reflects persistent structural problems in the Brazilian economy. According to her, factors such as the high cost of capital, high interest rates and difficulties in investing have a strong influence on national competitiveness.

The expert also highlights historical obstacles, such as the language barrier - since Brazil is a Portuguese-speaking country in a predominantly English-speaking global environment - and deficiencies in the population's financial education.

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High interest rates and debt
The report points to deterioration in the four pillars assessed: economic performance, government efficiency, business efficiency and infrastructure. In Carla Beni's assessment, the recent trajectory of the Selic rate helps explain this scenario.

The economist recalls that, during the pandemic, the basic interest rate reached 2% per year, but increased to 13.5% in just 18 months.

During this period, many companies resorted to cheap credit to get through the health crisis and, subsequently, needed to renegotiate their debts in an environment of much higher interest rates. The result was an increase in debt and default, reducing the investment capacity of the productive sector.

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Another factor highlighted by the expert is the weight of public debt service on government accounts. According to Carla, while only 0.3% of the federal budget is allocated to science and technology, around 46% is directed to interest payments and debt repayments.

For the economist, this reality limits the capacity to invest in strategic areas to increase competitiveness.

Infrastructure and competition for resources
Budget restrictions also affect investments in infrastructure, one of the criteria considered by the ranking. Carla Beni cites as an example the PAC-3 (Growth Acceleration Program), which, according to her, had resources reallocated to meet parliamentary amendments.

In the economist's assessment, the significant growth of these amendments in recent decades has intensified the dispute for resources between the Executive and Legislative branches, making long-term planning difficult and compromising the execution of structuring projects.

For Beni, this is one of the main challenges that the next governments will have to face.

Positive points
Despite the negative performance in the ranking, Brazil has some competitive advantages. Among the highlights are the ability to attract foreign investment, the potential in the area of renewable energy and the good position in terms of public subsidies, in which the country occupies fifth position.

Carla Beni also highlights advances in financial education, which has become part of the curriculum in public and private schools.

Although the results are not yet noticeable in the short term, the expectation is that this change will contribute to the formation of a more financially prepared population and generate positive impacts on the country's competitiveness in the coming years.

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Source: CNN