I. Brazil Overview

 

 

A. Country Data:

Country Name	Brazil
Government System	Federative Republic
Capital	Brasilia
Administrative divisions	26 states and 1 federal district
Population	186 million
Population Growth Rate	1.06%
Religion	Roman Catholic (80%)
Language	Portuguese
Currency	Real (BRL)
Fiscal Year	Calendar Year

 

B. Domestic Economy:

GDP (2005)	US$ 795.59 Billion
GDP Real Growth Rate, % - 2005	2.3%
GDP per capita	US$ 4,323.3
GDP per capita - purchasing power parity	US$ 8,578
IPCA Inflation % (per annum)	5.69 %
IGP-M Inflation %(per annum average)	1,21%
Unemployment %, end of period	10.04%
Trade Balance	US$ 44.7 Billion
FX Rate (per annum average)	2.15 (November 2006)
Interest Rate Selic (% p.a. average)	13.75 (November 2006)

 

C. Government: 

Executive branch	Chief of State	- President Luiz Inácio Lula da Silva *,  - Vice President Jose Alencar.
Legislative branch	Bicameral National Congress	- Federal Senate:  81 seats; three members from each state and federal district elected according to the principle of majority to serve eight-year terms; one-third elected after a four-year period, two-thirds elected after the next four-year period  - Chamber of Deputies: 513 seats; members are elected by proportional representation to serve four-year terms.
Judicial branch	Supreme Federal Tribunal Higher Tribunal of Justice Regional Federal Tribunals	11 ministers are appointed for life by the president and confirmed by the Senate. Judges are appointed for life but like all federal employees, have a mandatory retirement age of 70

 * Note - the president is both the chief of state and head of government.
Sources:  Ministry of Finance/ Ministry of Development, Industry and Foreign Trade.

Rio de Janeiro, Brazil

II. Economy Overview

            Possessing 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 2003-06 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.
            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 2005, 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 and again posted a current account surplus.
            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 2004 - 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.

>Trade Statistics
            With a gross domestic product (GDP) of approximately US$ 795 billion, Brazil has the 10th largest economy in the world and represents about half of the South American territory and economy. Brazil is rich in agricultural, mineral, and industrial resources and offers substantial market opportunities for exporters around the world in a diverse array of sectors that support Brazil’s drive to industrialize further, court energy and transportation investment, and cultivate export-led growth.

III. Foreign Direct Investment
            Over the last few years Brazil has been among the world's leading recipients of foreign direct investment (FDI). In 2005, Brazil received approximately US$ 16 billion in FDI. The impressive figures reflect the strong, longstanding presence of international companies in Brazil’s leading economic sectors, such as telecommunications, chemicals and pharmaceuticals, automotive and mechanical, besides those in many services sectors.
            The inflow of FDI has been sustained, among other factors, by the size of the domestic market, political stability, openness and improved macroeconomic conditions, especially in terms of enhanced fiscal discipline and adjustment, as well as by various economic reforms. Besides their very positive financial impact on the balance of payments, the FDI inflows have played a major role in enlarging the industrial capacity and are strengthening the competitive pattern of the economy.
Sources: *Brazilian Finance Ministry and *CIA World Fact Book