Welcome to Management in Focus, the monthly newsletter from Galeazzi & Associados. Every last Monday of each month, you receive exclusive analyses, topics to keep an eye on, and insights from Galeazzi & Associados on what's shaping the market and business landscape. Our goal is to enhance your planning and decision-making with insights and perspectives from our professionals.

As we write this newsletter, a series of news dominates the portals of Brazil: the Copom's decision to maintain the Selic rate, the approval of the fiscal framework in the Senate, the possibility of a regional development fund for states with tax reform, the creation of a possible dual-value added tax (VAT)... These are signs that still indicate certain uncertainties from the government and reactions from the market itself.

However, beyond the political and economic discussions—and perhaps as a consequence of all the movements we have witnessed in the country in recent years—we are faced with the result of the 34th Competitiveness Yearbook (or WCY, the acronym in English for World Competitiveness Ranking). This marks the country's third consecutive drop. After ranking 57th in 2021 and 59th in 2022, Brazil lost one more position and now holds the 60th position. One of the factors that most impacted this result was, according to researchers, the decline in the efficiency and productivity of Brazilian companies, ranking second to last, exacerbated by the last place in Education.

The Yearbook analyzes 333 diverse indicators to present economies with the greatest potential for long-term growth. For each country, four categories prevail in this analysis: economic performance, government efficiency, business efficiency, and infrastructure. In the face of the leadership of Denmark, Ireland, Switzerland, and Singapore, we lag behind countries like Indonesia (34th), Peru (55th), and Colombia (58th).

Brazil's recurring loss of competitiveness is both a symptom of many of the problems and difficulties that companies have experienced in recent times and demonstrates endemic factors—high-interest rates, a complex and inefficient tax system, poorly qualified workforce, among others—with which we have lived for a long time.

Unfortunately, the 'Brazil cost' continues to be an unfavorable element for businesses. Until public and economic agents can reduce its impact—a hope we cannot afford to lose—it is crucial for companies to continue investing increasingly in process improvement and pay strong attention to financial indicators to maintain efficiency and invest in innovation.

Until next month!