Brazil privatisations will not prove to be a cure-all

Subject

Brazil's privatisation plans.

Significance

On August 20, the Brazilian government announced the addition of nine further state-controlled companies to the list of firms it aims to privatise. The programme of privatisations and concessions figures high on President Jair Bolsonaro’s economic agenda, in part due to severe fiscal constraints and the lack of funds for investment. The list of companies set for privatisation includes not only ones linked to infrastructure projects but also enterprises in key sectors such as power, technology and postal services.

Impacts

• The effects on economic growth from planned privatisations will probably prove to be limited.
• Political resistance is likely to delay some privatisations and concessions.
• Privatisation resources may alleviate public accounts temporarily.