To: Slagle who wrote (16184 ) 4/5/2007 2:54:21 AM From: elmatador Respond to Brazil’s government expenditures can be placed in three main categories: consumption, such as welfare spending and public-sector wages; investments; and debt servicing. They constitute more than 40 percent of GDP—a share much higher than in other developing economies—because social-welfare spending has increased dramatically in recent years. Brazil also spends a comparatively high share of GDP on servicing its debt, which mostly has relatively short maturities and is indexed to inflation and interest rates, thus making the country vulnerable to shocks.5 Meanwhile, government investments in the infrastructure, which have declined from 3.6 percent a year of GDP in the early 1980s to around 1 percent today, are considerably lower than those of many countries at a comparable stage of development.mckinseyquarterly.com
