Because the Brazilian economy is really very flawed and no government since 1988 has ever had enough power (and vision) to reform what needs to be reformed. Some such flaws are indeed beyond government control (i.e. they can't be reformed meaningfully).

I'll try to break things down in a most didactic way.

1. The Brazilian public pensions system has been broken for almost three decades. When it was created, men lived an average 60 years and women lived 55 (due to risks of childbirth). To have people work 30 years (for men) or 25 before retiring (or retiring out of old age at 65 years for men or 60 for women) seemed sensible. Most women didn't work, so it seemed fair to let them collect the retirement paycheck of their deceased husbands. But now things have changed. Brazilian men live an average 70 years and women live an average 73. Most women work and are able to retire on their own. As a result, the system that was created with the simple math that for every 5 active paid, 1 retired, has lost balance. The government has cut the pensions of those who earn more, meaning that you become poorer when you retire, unless you only got 1 minimum wage when you worked. You can't defy math, but in spite of it, increasing the minimum age of retirement or anything like it has been considered a taboo in Brazilian politics. As a result our public pensions system—even when most retired people only collect 1 minimum wage or a little more—runs a huge (40%) deficit that drains resources that should be used for other things.
2. To add insult to injury, there are many public service careers that have their own pension systems which are even worse. Army officials, for instance, can not only legate their pensions for their wives, but for their daughters while they are single; so they don't marry, just move in with a man and collect their fathers' paychecks for the entirety of their lives. There are instances of "single" daughters of former military men who died before World War II still collecting their paychecks. They have lived all of their lives without working at all, and sometimes the pension is so high that their companions have not worked either. I personally know a man who claimed to have never done any kind of work for anyone, not even for himself ("I have never hung a picture from the wall, boy!").
3. The Brazilian government has a public healthcare system that is quite costly and is unfairly exploited. The problem with SUS (Unified Health System) is that it is exploited by the medicine industry, many doctors, many politicians, some of the public, and industries and services everywhere. Most money poured into it is funneled into the deep pockets of those who should manage it. Where it is well-managed we see small towns with state-of-the-art hospitals, shiny-new ambulances, door-to-door prevention of avoidable diseases and all kinds of services that you would expect to have in a European country. But almost everywhere else, we see derelict hospitals, malfunctioning equipment, long queues, disgruntled nurses (they're overworked, underpaid and often verbally abused) and generally unsafe conditions.
4. To add insult to injury, most Brazilians pay private healthcare insurance, but when they can't get treated for a more serious disease (like cancer) they come to SUS seeking to be treated. They come with high expectations (private clinics here can be just as good as anywhere in Europe) and are then shocked by what they see.
5. Brazil’s huge territory presents a huge challenge. It is relatively easy to fully develop a small country, like Germany, Britain or Denmark: There isn't much to be built in terms of roads, rails, bridges, ports and the like. Most European countries, for instance, only have one major port, or only a handful of them. Most European countries only have one major international airport. Brazil needs much more. We have mythically long roads like the BR-101 (from Natal, RN to Porto Alegre, RS), the BR-040 or the BR-116. To build and maintain them costs a lot. We need several regional ports to make the economy of all regions viable. We have dozens of ports (at least 12 are "major": Santos, Paranaguá, Sepetiba, Rio de Janeiro, Salvador, Suape, Belém, Itajaí, Fortaleza, Vitoria and Recife); and hundreds of airports (at least 20 of them are international (the major ones are Galeão-Rio de Janeiro, Viracopos-São Paulo, Guarulhos-São Paulo, Confins-Minas Gerais, Fortaleza, Porto Alegre, Brasília and Natal).
6. Private enterprise tends to concentrate itself, which means government incentives (or even government direct intervention) is required to develop regions that need to be developed. Historically Brazil developed along the lines that either supplied for-export agriculture or carried the commodities it produced.The interior was mostly unpopulated, but the government needed to develop the interior to secure its possession against more densely-populated neighbours and against threats of neo-colonisation (like the muddy affair of Bolivia with the USA that leaded to the Acre crisis). Private enterprise was not and has not been interested in any of this because development of new territory is often unprofitable on its own (it is only profitable when you are a government contractor being paid by the hour).
7. This means that the Brazilian government has had to actively put forth "development strategies". We still have "Planos Plurianuais" which are more or less inspired by the Soviet Union's "Five-Year Plans"—and before you accuse us of being "communist", take note that such plans started under the military regime that was put in place by the CIA-aided junta.
8. Brazilian taxes are not fair or rational. They are easily avoided and when they are not, they provide such an increase in cost that they create a competitive disadvantage for law-abiding enterprises. As a rule of thumb the Brazilians hate to pay taxes. They love to quote that the Portuguese word for tax ("imposto") is the participle of the verb that means "to force" (cognate "impose"). They say that tax is money you surrender when you are forced to. Moreover, powerful people always avoided taxes to show off that they were not mere mortals. This still is the case: you avoid taxes as much as you can, and the government increases rates to reach a revenue goal, which makes paying taxes even more painful, which causes more people to want to avoid them and so on. To try to circumvent tax avoidance the government uses a lot of indirect taxes (like the VAT found in some European countries). Such taxes are "compounding" (meaning that the same product may be taxed more than once, every step in its production process). Some products are so taxed that the greater part of the final consumer price is taxes! To circumvent this, many companies sell products off the counter in hard cash, without registering the sale on their books. Tax evasion is so commonplace that some companies have a real revenue up to eight times higher than the official revenue. Since most taxes are very high, if you pay all your taxes you will go bankrupt or priced out of your market (your prices will have to be significantly higher than your competitors).
9. The government is forced to run a very high strong currency surplus to keep its international credibility, which drives a lot of local production for the export market, which creates inflation. A country like the USA does not have to run a strong currency surplus. In fact the USA can print money as fast as it can run presses, because the world will swallow the banknotes thirstily. The idea of "international reserves" is alien to the American mindset. But Brazil, in order to achieve investment grade, has to collect two times the value of its external debt in hard cash, denominated in either dollar, yen, euro or pound. In practice this means that Brazil had to have money enough to pay the external debt (it didn't in fact pay it, because some of it cannot be paid before due, some of it is not owned by the federal government, and because having the money is more important than having no debt).
10. To have so many dollars around, Brazil needs to export, which means that most of the output of the local industry and agriculture will be directed to the international market, tying the prices of foodstuffs and consumer goods to the current value of the strong currencies in which they are sold abroad. So, when the dollar rises for some reason, food, fuel and lots of goods instantly become more expensive in Brazil simply because their producers could sell them in dollars. Brazilian inflation is never vanquished, therefore, because every international hiccup in the value of "strong currency" hits the local market.
11. As a result of all of the above, the Brazilian government runs on a deficit and needs to borrow from banks. The high internal debt means that about 40% of state revenue goes directly to service the debt (i.e. interest). The government should reduce interest rates to relieve the deficit, but it can't, because low rates would make foreign investors flee, who give liquidity to the internal market. It would also affect the profit and the stability of the banking system (more than 1 million people work in it or in services related to it), exposing the country to a bank run, to increased foreign competition in the banking system and to the possibility of litigation. The government has tried to cut rates slowly, to let the banks adjust, but it had undesired side effects: people cashed their savings to buy real estate or consumer goods, creating a new risk of a bank run and producing a "real estate bubble".

All in all, Brazil has to keep rates high to stabilise an intricate card castle that no one has yet had the balls to make robust. It will eventually crumble, but nobody would like to be the hand to move the card that causes the crumbling. Would you?

What could the government do?

• A sensible reform of the pensions system would reduce the need to drain a lot of money from the state budget to fund for pensions of retired people. This sensible reform cannot be done, however, in a normal, democratic situation. To touch "established rights" (like those of the military men’s daughters) is not possible under our present legal framework. So we must wait for a coup or a complete economic meltdown to see any possibility of change. A democratic system that does not provide ways for its own revision and improvement, but rather puts up barriers to prevent change, is a faulty democratic system that somewhat seems to have been put in place temporarily, or to have been created with the purpose of defending privileges.
• Then we would need a tax reform, with fewer compounding taxes and more simple taxes (like income tax). Taxes should not be so high to cause your downfall, but there should be strong means to identify and punish tax evaders, no matter who.
• We need to weed out corruption (we have been fighting it hard, but this is a cultural change that takes time). Corruption is destroying most of the state's institutions and threatens the future of the country.
• And we need to reduce our dependency on the dollar. Too much of our debt and our reserves are denominated in dollars, which means that every time there is a major change (for better or worse) in the USA we feel the effects. To diversify our commercial partners and establish ties with diverse countries (like Russia, China, India, Angola, South Africa and others) can make us more resilient to crises.

And we need the help of the faeries too.