Private consumption has been a key driver of growth in Brazil for more than a decade. Over
this time, Brazilian consumers have benefited from a favorable policy environment, a rapid
phase of development-dramatically increasing economic, financial and social inclusion-
and a supportive external environment. Meanwhile, infrastructure gaps have widened and
investment and productivity levels have fallen behind. The consumption-led growth model
now appears to have run its course. The prospect of a period of macroeconomic adjustment
presents an opportunity to adjust policy settings to ensure stronger, more balanced and
sustainable growth over the medium term.