An Overview of Brazils

Economy
February 1st, 2012
Team Ita:
Shivani Arora
Colleen Butts
Lakshmi Gupta
Spencer Jones

AGENDA

Overview
Major Economic Sectors
Economic History
Strengths and Weaknesses
Political Influences
Outlook

CURRENT SNAPSHOT
The worlds
seventh
wealthiest
economy

Current
President Dilma Roussef

GDP = $2.1
trillion

GDP per capita

(PPP, 2010): US
$11, 127

Literacy Rate,
adult total 90%

Labor
Participation
Rate 65%

Unemployment
= 4.7%

Population:
190.7 million

Inflation =
6.5%

PRIMARY EXPORTS

Value = $199.7
Major Export Partner
billion
Transport Equipment
Germany; 10%
Iron Ore
China; 31%
Netherlands; 13%
Soybeans
Argentina; 21%
Cofee
US; 26%
Footwear

PRIMARY IMPORTS

Value = $187.7
Major Import Partners
billion
Machinery
Japan; 9%
Electrical and
Germany; 15% US; 33%
Transport Equipment
Argentina; 18%
Chemical Products
China; 26%
Oil

*Based on 2010

AGRICULTURAL SECTOR
GDP: 6.1%, Labor Force:
20%
Sugarcane, Cofee,
Soybeans
Cattle: 1.1 Million Tons
(2011), $4.8 Billion Revenue
Issues: Greenhouse Gas
Emissions, Deforestation
and Water Pollution

INDUSTRIAL SECTOR
GDP: 28%, Labor Force: 14%
Manufacturing: Steel, Machinery,
Automobile Parts, Aircrafts, Chemicals,
Consumer Durables
Mining: Nickel, Tin, Zinc
Mineral Resources: Iron and Manganese
Hydroelectric Power: 69%, 77,000
megawatts
Biofuel Production and the United States

SERVICE INDUSTRY
GDP: 67.5%, Labor Force:
66%
Banking: Ita Unibanco,
Banco Bradesco, Bank of
Brazil
Telecommunications,
Energy Commerce,
Computing

BRAZILS ECONOMIC
TIMELINE

Sweeping changes

Political &
Economic
1930 revolution:
Old Republic
abolished
New State
dictatorship

1950s

Spectacular
Growth

Hyperinflation to
Stabilization

GDP growth rate

jumped to 11%
External trade
expansion
1973 Oil shock

1960s

Stagnation &
Industrialization

Import
substitution of
consumer goods
Rapid growth for
manufacturing
post 1964
GDPgrowth rate

1970s

Bankruptcy leading to
a stabilization plan
Political instability

1980s

Stagnation,
Inflation and
Crisis

More oil-shocks
Economic
decline: IMF
control:
inflation at
5000%

1990s

2000s Now

Economic
powerhouse

End of inflation
Rise of
consumerism
Growth of 7.5%
in 2010
Lula Silvas
rise to power

PLANO REAL
Measures Taken to Stabilize Economy in
1994:
New Fiscal Strategy privatization of
State companies
Monetary Reform created an index URV,
and plural reasis became new currency
Opened up economy to international
investors

STRENGTHS
Largest Recipient of FDI in Latin
America
Global Leader in Science and
Technology
Advanced Industrial Sector
Exports: Natural Resources,
Agriculture
No longer dependent on foreign oil

WEAKNESSES
Poverty
Domestic
Debt
Inequality

CURRENT ECONOMIC ISSUES

External Shocks
FDI and over-speculation could cause
bubbles
Interest rate adjustments
Risk of bad equilibrium

Exchange rates and the appreciated

real
Corruption

SECTOR-SPECIFIC ECONOMICSs
Industry vs. Emissions
Agriculture and Energy vs.
Deforestation
Meeting Brazils energy demands

OUTLOOK
Tighter monetary and fiscal policy
Inflation continues to be an issue
Strong economic recovery following global
recession

RESOURCES
http://www.economywatch.com/world_economy/brazil/industry-sector-in
dustries.html
http://www.state.gov/r/pa/ei/bgn/35640.htm#econ
http://www.guardian.co.uk/environment/2009/nov/10/brazil-emissions
http://www.bloomberg.com/news/2011-12-23/brazil-s-top-banks-tighten-gr
ip-on-loans-as-yields-soar-for-small-rivals.html
http://www.gfmag.com/gdp-data-country-reports/311-brazil-gdp-countr
y-report.html#ixzz1krfqM9gQ
http://www.state.gov/r/pa/ei/bgn/35640.htm
http://www.bbportuguese.com/economic-history-of-brazil.html
http://
www.thedailybeast.com/newsweek/2001/09/03/the-nerd-who-saved-braz
il.html
http://
www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-save
d-brazil
http://
internationalbusiness.wikia.com/wiki/Brazilian_Economic_Systems_Str
engths/Weaknesses
https://

RESOURCES

http://www.americasquarterly.org/node/3255)
http://online.wsj.com/article/BT-CO-20120123-706648.html)
http
://www.bloomberg.com/news/2011-09-12/brazil-economists-see-faster-infla
tion-slower-growth-after-rate-reduction.html
, http://mrzine.monthlyreview.org/2011/bp311211.html
http://
www.washingtonpost.com/business/brazilian-tourists-spend-a-record-am
ount-of-dollars-abroad/2012/01/24/gIQAqWRXNQ_story.html
http://www.tradingeconomics.com/brazil/current-account, http://
www.france24.com/en/20110708-brazil-accuses-china-us-over-currency-po
licy
http://
www.businessweek.com/news/2012-01-20/brazil-futures-yields-decline-ascentral-bank-signals-more-cuts.html
P
http://
en.mercopress.com/2011/09/20/brazil-sponsors-forex-anti-dumping-import
-barriers-to-compensate-us-dollar-devaluation
http://
www.econ.puc-rio.br/gfranco/How%20Brazil%20Beat%20Hyperinflation.h