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Increasing global importance

Brazil’s economy is on the up and is of increasing global importance. Its GDP in 2006 stood at $1.62 trillion, placing it tenth in the global league table, and GDP growth of 2.8% – while unimpressive compared with other developing markets – saw it outstrip the euro zone and the UK. It is the largest economy in South America, and the third largest in the Western Hemisphere. GDP per capita stood at $8,600 at the end of 2006.

Service-led economy

The foundation of much of Brazil’s wealth – agriculture – now accounts for only 8% of GDP (although it employs 20% of the working population). The largest sector is service, responsible for 54% of GDP, with industry providing for the remaining 38%. Officially, fewer than 10% of Brazilians are unemployed, although unemployment remains widespread and it should be noted that much of the information underpinning these figures is either fragmentary or unavailable due to the difficulty of assessing the state of employment in the favelas.

Exported goods

In terms of manufactured goods, Brazil is a major producer of cars and other vehicles, agricultural equipment, electrical and electronic items, aircraft and military material. Its leading agricultural exports include coffee, soya beans and associated products, citrus fruits and juices, and beef.

Concentration of industry in the south

Brazil’s industry is concentrated in the south of the country and while there is industrial growth in the north-east and interior, the south is likely to remain the country’s industrial heartland thanks to the concentration of labour and infrastructure in the region. Likewise, Brazil’s banking and service sectors have their major centres in the south.

Increasing foreign investment

Foreign investment in Brazil has become increasingly impressive in recent years, particularly from the USA. The latter has been invaluable in providing the equipment and know-how behind Brazil’s industrialisation and, more recently, its emergence as a financial centre of some importance.

Full of potential

At the beginning of the century Brazil suffered an economic downturn and currency depreciation which lasted from 2001 to 2003, caused in part by the country’s large and badly ordered national debt structure. However, President Lula’s economic policies have brought Brazil back up towards the black and its current economic growth has enabled it to restructure its debt successfully. Financial group Goldman Sachs is now tipping the country to be in the top five global economies by the middle of this century.

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