The Brazilian economy -2006-

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. In 2004, Brazil enjoyed more robust 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, all reinforced by a series of IMF programs. The currency depreciated sharply in 2001 and 2002, which contributed to a dramatic current account adjustment; in 2003 to 2005, 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, and Brazil in 2005 surpassed the previous year’s record export level. 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 in 2005, while Brazil’s foreign debt (a mix of private and public debt) is large in relation to Brazil’s small (but growing) export base. Another challenge is maintaining economic growth over a period of time to generate employment and make the government debt burden more manageable.
GDP (purchasing power parity)

$1.536 trillion Est.

GDP (official exchange rate)
$619.7 billion Est.

GDP – real growth rate

2.3% Est.
GDP – per capita (PPP)

$8,300 Est.

GDP – composition by sector
agriculture: 8.4%
industry: 40%
services: 51.6%
Labor force
90.41 million

Labor force – by occupation
agriculture: 20%
industry: 14%
services: 66%

Unemployment rate
9.8% Est.

Population below poverty line

22% Est.

Household income or consumption by percentage share

lowest 10%: 0.7%
highest 10%: 31.27%
Distribution of family income – Gini index

Inflation rate (consumer prices)
Investment (gross fixed)

19.9% of GDP


revenues: $140.6 billion
expenditures: $172.4 billion; including capital expenditures

Public debt
51.6% of GDP

Agriculture – products
coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus; beef

textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other machinery and equipment
Industrial production growth rate
Electricity – production

387.5 billion kWh

Electricity – consumption

359.6 billion kWh
Oil – production
2.01 million bbl/day
Oil – exports
241,700 bbl/day
Oil – proved reserves

15.12 billion bbl
Natural gas – proved reserves
240 billion cu m


$115.1 billion f.o.b

Exports – partners
US 19.6%, China 7.5%, Argentina 6.9%, Germany 5.3%, Mexico 4.3%
$78.02 billion f.o.b.

Imports – partners
US 19.7%, Germany 8.7%, Argentina 8.2%, China 6.2%, Nigeria 6.1%

Reserves of foreign exchange and gold
$53.8 billion

Debt – external
$188 billion
Economic aid – recipient
$30 billion

Sources: CIA Factbook and Banco du Brazil

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