Also see Affordable Housing Brazil
Affordable Housing Brazil Projects
Brazil Economic Situation
Brazil has the ninth-largest economy in the world, with a diversified middle-income economy with wide regional
variations in development progress. The Economist reported in April 2007:
“[…] Brazil is the steadiest of the BRICs. Goldman Sachs recently reaffirmed the country's BRIC status. Unlike
China and Russia it is a full-blooded democracy; unlike India it has no serious disputes with its neighbours.
It is the only BRIC without a nuclear bomb. The Heritage Foundation's “Economic Freedom Index”, which measures
such factors as protection of property rights and free trade, ranks Brazil (“moderately free”) above the other
BRICs (“mostly unfree”). One of the main reasons why Brazil's growth has been slower than China's and India's
is that Brazil is richer and more urbanised”.
Source: The Economist, Land of Promise (12th April 2007)
Most large industry is agglomerated in the South and Southeast. The Northeast is the poorest region of Brazil,
but it is beginning to attract new investment.
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.
Strong external demand and a more active export policy have contributed to booming export earnings since 2003,
bringing a large adjustment on the external accounts: the trade surplus swelled from US$2.7bn in 2001 to
US$44.7bn in 2005, transforming the current account from a deficit of 4.6% of GDP in 2001 to a surplus of 1.8%
of GDP in 2005.
The government continues to focus on reforming the domestic economy to deliver long term cash savings and
create a more flexible environment for business.
In March 2005 Brazil concluded its latest programme with the IMF, under which £21.5 billion of emergency
funding has been made available to Brazil since 2002.
The Brazilian Government chose, however, to use only £8.8 billion of this, drawing down nothing in the final 18
months of the programme. In December 2005 it also announced that it would re-pay its IMF debt (US$15.5billion)
by the end of 2005 - two years ahead of schedule, saving US$900 million in interest payments. It has also fully
re-paid its Paris Club obligations to the UK, and retired all of its Brady Bonds – also ahead of
schedule.
The Brazilian Government remains committed to increasing savings and reducing expenditure in order to deal with
a high debt/GDP ratio (of around 51%)
The average annual GDP growth in Brazil is projected to be significantly stronger in 2007-11 than Brazil‟s
historical average of 2.5%. Domestic demand will be a more powerful engine of growth in 2007-11 than in
2002-06. Lower inflation and real interest rates will foster continued steady growth of real income, investment
and employment.
Targeted tax breaks and other measures announced in January 2007 will help stimulate investment in
infrastructure and IT. The external balance is projected to make a positive contribution as investment expands
export capacity.
Since the election of President Lula Da Silva in October 2002 inflation has stabilised and last year, at only
3%, it fell well below the target of 4.5% set by the central bank. The markets expect it to remain below target
this year.
Real interest rates are at their lowest level since 2001 and Brazil has enjoyed a robust growth that has
yielded increases in employment and real wages.
The living standards of the poor have been soaring, thanks in part to handouts from the federal government. The
introduction of the Real as Brazil's currency in 1994 ended decades of high inflation. Income inequality, from
which Brazil suffers more than most other countries, has at last begun to shrink.
Source: Foreign & Commonwealth Office of Great Britain
Source: The Economist: Brazil Fact Sheet 23 Source: Foreign & Commonwealth Office of Great
Britain
Source: The Economist: Economic Data
Facebook
Digg
Delicious
Google Bookmarks
Reddit
Stumbleupon
Twitter
Technorati