Brazil Market

Brazil has a moderate free market and export-oriented economy. Measured nominally, its Gross Domestic Product surpasses a trillion dollars, the tenth in the world and the third in the Americas; measured by purchasing power parity, $3.8 trillion, making it the eighth largest economy in the world and the second largest in the Americas, after the United States.[5] Its nominal per capita GDP has surpassed USD9,000 in 2007, due to the strong and continued appreciation of the Real for the first time this decade. Its industrial sector accounts for three fifths of the South American economy's industrial production.[6] The country’s scientific and technological development is argued to be attractive to foreign direct investment, which has averaged US$ 20 billion per year the last years, compared to only US$ 2 billion/year last decade,[6] thus showing a remarkable growth. The agricultural sector, locally called the agronegócio 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.[6] The agricultural sector and the mining sector also supported trade surpluses which allowed for massive currency gains (rebound) and external debt paydown.

 

Brazil is a member of diverse economic organizations, such as Mercosur, SACN, G8+5, G-20 and the Cairns Group. Its trade partners number in the hundreds, with 74% of exports mostly of manufactured or semimanufactured goods.[6] 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).[7] It is also a pioneer in many fields, including ethanol production.

 

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.

 

Brazil is the 10th largest economic power in the world with a GDP of nearly 800 billion dollars in 2006. President Lula’s prudent fiscal and monetary policies, coupled with necessary microeconomic reforms have restored confidence in this market. However a strict fiscal discipline and restrictive budgetary policies will not allow the government to pursue an ambitious reform agenda and thus will restrain growth. GDP growth rate was 3.7% in 2006 and 4.4% in 2007, with a forecast of 4.0% for 2008 (according to the IMF). Brazil has made progress but significant vulnerabilities remain. The Brazilian government’s debt (largely domestic) remains high, at 50% of GDP. Total foreign debt, while falling, is still large in relation to Brazil's modest export base. The inflation rate has decrease from 6.9% in 2005 to 3.6% in 2007.