Investments in infrastructure and economic growth in Brazil: an analysis of the effects of Pró-Infra using an EGC model with recursive dynamic

Abstract

The present work aims to simulate the effects of infrastructure investments expected by the Pro-Infra program of the Ministry of Economy of Brazil on GDP, productivity (PTF), and investments of sectors not linked to infrastructure. The results were obtained using a Dynamic Computable General Equilibrium model calibrated regionally for the 27 UF in Brazil and 124 sectors/products. The results obtained indicate that Pró-Infra can bring the average annual growth rate of Brazil to somewhere between 2.34% and 3.22% for the next 20 years, con¬sidering a reference scenario of 1.65%. In this way, the rate of investment in infrastructure would reach 6.5% of GDP in 2040.