Economy in Brazil, Brazil Business - Allo' Expat Brazil
Allo' Expat Brazil - Connecting Expats in Brazil
Main Homepage
Allo' Expat Brazil Logo
   


Subscribe to Allo' Expat Newsletter
 
Check our Rates
   Information Center Brazil
Brazil General Information
 
History of Brazil
Brazil Culture
Brazil Cuisine
Brazil Geography
Brazil Population
Brazil Government
Brazil Economy
Brazil Communications
Brazil Transportations
Brazil Military
Brazil Transnational Issues
Brazil Healthcare
Brazil Expatriates Handbook
Brazil and Foreign Government
Brazil General Listings
Brazil Useful Tips
Brazil Education & Medical
Brazil Travel & Tourism Info
Brazil Lifestyle & Leisure
Brazil Business Matters
  Sponsored Links


Check our Rates
WEATHER

Fair
19°C
CURRENCY RATES
1(USD) = 1.5622(BRL)
LOCAL TIME
Thu | 02:06AM

Brazil Economy
 
 
 
 
 

Brazil has one of the world's largest economies, with well-developed agricultural, mining, manufacturing and service sectors. Vast disparities remain, however, in the country's distribution of land and wealth. Roughly one fifth of the workforce is involved in agriculture. The major commercial crops are coffee (Brazil is the world's largest producer and exporter), citrus fruit (especially juice oranges, of which Brazil also is the world's largest producer), soybeans, wheat, rice, corn, sugarcane, cocoa, cotton, tobacco and bananas. Cattle, pigs, and sheep are the most numerous livestock. Timber is also important, although much is illegally harvested.

Brazil has vast mineral wealth, including iron ore (it is the world's largest producer), tin, quartz, chrome ore, manganese, industrial diamonds, gem stones, gold, nickel, bauxite, uranium and platinum. Most of Brazil's electricity comes from water power, and it possesses extensive untapped hydroelectric potential, particularly in the Amazon basin.

Brazil has a free market and export-oriented economy. Measured in purchasing power parity, its GDP surpassed a trillion dollars, making it the ninth largest economy in the world and the largest in Latin America. Its industrial sector accounts for three fifths of the South American economy's industrial production. The country’s scientific and technological development is argued to be attractive to foreign direct investment, which has averaged US$ 20 billion per year the last years, compared to only US$ 2 billion/year last decade, thus showing a remarkable growth. The agricultural sector, locally called the agrobusiness sector, has also been remarkably dynamic: for two decades this sector has kept Brazil amongst the most highly productive countries in areas related to the rural sector.

Brazil and is a member of diverse economic organisations, such as Mercosur, SACN, (G8+5), G-20 and the Cairns Group. Its trade partners number the hundreds, with 74% of exports mostly of manufactured or semimanufactured goods. Brazil's exports also include coffee, iron ore, soybeans, footwear, concentrated orange juice, beef and tropical hardwoods.

Brazil's main trade partners are: the EEC (26% of trade), the United States (24%), Mercosur and Latin America (21%) and Asia (12%).

The owner of a sophisticated technological sector, Brazil develops projects that range from submarines to aircraft and is involved in space research: the country possesses a Launching Center for Light Vehicles and was the only country in the Southern Hemisphere to integrate the team responsible for the construction of the International Space Station (ISS).

Brazil is also a pioneer in the fields of deep water oil research from where 73% of its reserves are extracted. According to government statistics, Brazil was the first capitalist country to bring together the ten largest car assembly companies inside its national territory.

Overview

Economy - overview
Characterized by large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil's economy outweighs that of all other South American countries and is expanding its presence in world markets. From 2001-03 real wages fell and Brazil's economy grew, on average only 2.2% per year, as the country absorbed a series of domestic and international economic shocks. That Brazil absorbed these shocks without financial collapse is a tribute to the resiliency of the Brazilian economy and the economic program put in place by former President CARDOSO and strengthened by President LULA DA SILVA. Since 2004, Brazil has enjoyed continued growth that yielded increases in employment and real wages. The three pillars of the economic program are a floating exchange rate, an inflation-targeting regime, and tight fiscal policy, initially reinforced by a series of IMF programs. The currency depreciated sharply in 2001 and 2002, which contributed to a dramatic current account adjustment; from 2003 to 2006, Brazil ran record trade surpluses and recorded its first current account surpluses since 1992. Productivity gains - particularly in agriculture - also contributed to the surge in exports. While economic management has been good, there remain important economic vulnerabilities. The most significant are debt-related: the government's largely domestic debt increased steadily from 1994 to 2003 - straining government finances - before falling as a percentage of GDP beginning in 2003. Brazil improved its debt profile in 2006 by shifting its debt burden toward real denominated and domestically held instruments. LULA DA SILVA restated his commitment to fiscal responsibility by maintaining the country's primary surplus during the 2006 election. Following his second inauguration, LULA DA SILVA announced a package of further economic reforms to reduce taxes and increase public investment. A major challenge will be to maintain sufficient growth to generate employment and reduce the government debt burden.

GDP (purchasing power parity)
$1.655 trillion (2006 est.)

See more information on the next page... (next)