Brazil Economic Structure
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Brazil is considered one of the four emerging markets in the world, along with Russia, India and China, since it’s rapid growth and development of the economy in 2003.
Pegged by economic and political problems in the 1980s, Itamar Franco’s government managed to stabilize its economy by introducing the “Plano Real“, a set of economic measures that bring down the nation’s high inflation rate. The inflation rate dropped and the real appreciated.
Brazil is considered one of the four emerging markets in the world, along with Russia, India and China, since it’s rapid growth and development of the economy in 2003.
Pegged by economic and political problems in the 1980s, Itamar Franco’s government managed to stabilize its economy by introducing the “Plano Real“, a set of economic measures that bring down the nation’s high inflation rate. The inflation rate dropped and the real appreciated.
From 2003 onwards, the rise in demand of Brazil’s commodities has increased the country’s total exports, thus bringing overall economic growth. Brazil recorded a growth of 8.48 percent in GDP (PPP) in 2004, 6.02 percent growth in 2005 and 7.34 percent in 2006. The economy expanded further in 2007 with 9.21 percent increase in GDP (PPP), and 7.46 percent in 2008. The appreciation of its real and increase of export prices aid in reducing the nation’s external debt, and increasing the budget for economic development.
During the 2008 global financial crisis, Brazil’s economic growth was under threat when the GDP (PPP) grow by just 0.27 percent. However, with huge international reserves, and the central bank to reduce interest rates, Brazil is one of the fastest country to get out the crisis,
Brazil is a member of numerous economic organizations, including Unasul, WTO, Mercosul, G-20 and the Cairns Group. Brazil has hundreds of trading partners, with 60 percent of its total exports made up of manufactured and semi manufactured goods. China is currently Brazil’s largest export market, primarily in purchases of Brazil soy, iron ore and steel.
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Economic Geography
Brazil has a total area of 8.5 million square km, and is the 5th largest country in the world in terms of area size. With only 6.9 percent of arable land, Brazil is the largest producer of agricultural products such as sugarcane, coffee, tropical fruits and frozen concentrated orange juice (FCOJ). Brazil is also a country rich in natural resources, including bauxite, gold, iron ore, manganese, nickel, phosphates, platinum, tin, uranium, petroleum, hydropower and timber.
Brazil is the 9th largest oil producer in the world, just behind United Arab Emirates, at 2.572 million barrels produced per day. A 2010 oil discovery off coast of Brazil by its state-run oil company, Petrobas boasted an estimate of 8 billion barrels of oil reserves.
Population and Labour Force
Brazil has a population of 203.4 million people, making it the 5th most populated country in the world. It has a labour force of 103.6 million people. The unemployment rate is 7 percent in 2010. Brazil is the largest Portuguese-speaking country in the world.
With Brazil’s economic progress in the past decade, one of the social problems the country face is poverty. Under the Lula administration, a social welfare program, Bolsa Famila, was introduced in 2003 to provide financial aid to 12 million poor Brazilian families. It is regarded as the largest social welfare program in the world, and has according the the Central Bank of Brazil, from 2003 to 2009, this program has helped 20.5 million people get out of poverty.
Industry Sectors
Agriculture in Brazil is well diversified, and the country is the largest producer of sugarcane, coffee, tropical fruits, frozen concentrated orange juice (FCOJ). Brazil’s agriculture is also important for the production of soybeans, corn, cotton, cocoa, tobacco and forest products. Agriculture contributes to 6.1 percent of the country’s total GDP in 2010, and employs 20 percent of its total labour force.
Brazil also has a diverse and well-developed industry, regarded as one of the most advanced industry in Latin America. It covers the automobile and parts, machinery and equipment, textiles, cement, computers, aircrafts, steel and petrochemicals, and consumer durables. The industry contributes 26.4 percent of the nation’s total GDP, and employs 14 percent of its total labour force.
Brazil is also one of the world’s leading producers of hydroelectric power, and hydropower accounts for 69 percent of the country’s total electricity generation. Nuclear energy contributes to 4 percent of Brazil’s electricity. The country currently has 2 nuclear power plant, Angra I and Angra II. Plans and work is on the way for the third plant, Angra III.
Brazil has an expanding services industry and it contributes about 67.5 percent of the nation’s total GDP, and employs about 66 percent of the total labour force. Brazil has a well-developed services sector, with major industries including telecommunications, banking, energy, commerce and computing sectors.
Brazil’s banking industry is financially strong and attracted huge inflow of foreign investment, with a strong national currency, and boast one of the highest interest rate in the world. Two of the largest banks in Brazil are government owned, but US and other foreign banks do have an a significant share of the financial market.
