In a remarkable turn of events, Brazil has seen significant improvements in both municipal development and income inequality, as highlighted by recent reports from the Federation of Industries of Rio de Janeiro State (FIRJAN) and the Brazilian Institute of Geography and Statistics (IBGE). For the first time, more than half of Brazil’s municipalities have reached moderate or high levels of development, according to the FIRJAN Municipal Development Index (IFDM). Published annually since 2008, the IFDM shows that in 2023, 52.7% of Brazilian cities achieved moderate or high development, a notable increase from 46.4% in 2022.
Despite this progress, 47.3% of municipalities still remain in a critical or low state of development. The share of municipalities rated as having moderate or high development has more than doubled over the past decade, rising from just 22.6% in 2013 to 52.7% in 2023. The number of municipalities classified as having moderate or high development jumped from 1,245 to 2,925 during this period.
However, Brazil continues to grapple with stark contrasts in development. As of 2023, 4.5% of municipalities were classified as having critical development, while 42.8% fell into the low category. A decade earlier, in 2013, those figures stood at 36% and 41.4%, respectively. The number of cities in the lower tier has decreased significantly, falling to 2,625 in 2023 from 4,254 in 2013, affecting a combined population of 57 million Brazilians.
Jonathas Goulart, head of economic studies at FIRJAN, remarked, “In effect, we’re looking at two Brazils under the same Constitution, with vastly different realities.” The IFDM uses official statistics to evaluate the socio-economic status of municipalities based on three key areas: employment and income, health, and education. Scores range from 0 to 1, with higher scores indicating higher levels of development.
FIRJAN classifies municipalities into four tiers: critical (up to 0.39), low (0.4 to 0.59), moderate (0.6 to 0.79), and high (0.8 or above). In 2023, the average score for cities in the critical category was 0.3428. At the current pace of progress observed between 2013 and 2023, these least developed cities would require another 23 years—until 2043—to reach high development. Goulart noted, “Some cities still haven’t reached the national average seen in the year 2000. They’re essentially two decades behind.”
Nationwide, the IFDM rose by 29.8% over the past decade, with 99% of municipalities seeing improvements. However, 55 cities experienced declines in their scores, including the capital Florianópolis and several cities in Rio de Janeiro state, such as Itaboraí, Belford Roxo, and Duque de Caxias.
The study ranked all 5,550 Brazilian cities by their development scores. In 2023, Águas de São Pedro in São Paulo topped the list with a score of 0.8932, followed closely by São Caetano do Sul (0.8882), Curitiba (0.8855), and Maringá (0.8814). At the other end of the spectrum, cities like Ipixuna in Amazonas and Jenipapo dos Vieiras in Maranhão ranked the lowest, with scores of 0.1583 and 0.1621, respectively.
In terms of employment and income, the national average score was 0.5864 in 2023, a 12.1% increase from 0.5231 in 2013. In 2023, one in four municipalities (25.2%) were in the critical range for employment and income, while one in five (20.3%) were in the high range. In highly developed cities, 39.4% of adults had formal jobs, compared to just 9.3% in critically underdeveloped ones.
Health indicators also reflect a disparity. The national average score for health was 0.6002 in 2023, a 29.8% increase over 2013. Only 1.9% of cities achieved high health scores, while 5.8% remained in the critical category. For instance, teen pregnancy rates starkly differed: 12% in high-development cities versus 41% in those with critical development.
Education scores showed a similar trend, with an average score of 0.6335 in 2023, representing a 52.1% increase since 2013. In high-development municipalities, only 8 out of 100 students were behind the recommended age for their grade level, while in critical cities, that figure rose to 40 in 100.
Meanwhile, the IBGE reported a significant drop in income inequality in Brazil, as measured by the Gini index, which fell to 0.506 in 2024. This represents a 2.3% decrease from the 0.518 recorded in both 2023 and 2022, marking the lowest level since the historical series began in 2012. The Gini index, which measures income concentration on a scale from 0 (maximum equality) to 1 (maximum inequality), indicates that while Brazil remains a very unequal country, there has been an improvement in income distribution.
Gustavo Geaquinto Fontes, an IBGE survey analyst, stated, “Undeniably, Brazil remains a very unequal country, but in 2024 we see an improvement in income distribution when comparing different indicators.” In 2024, the richest 10% of the population earned 13.4 times the income of the poorest 40%, with the average income for the richest at R$ 8,034 ($1,409) and for the poorest at R$ 601 ($105). This ratio is the lowest recorded since 2012, significantly down from a peak of 17.1 times in 2018, before the Covid-19 pandemic.
As Brazil continues to navigate its complex socio-economic landscape, these reports highlight both the strides made in development and the persistent challenges of income inequality. While the progress is encouraging, the journey toward equitable growth remains ongoing.
