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. Since 2004, Brazil has enjoyed continued 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, initially reinforced by a series of IMF programs. The currency depreciated sharply in 2001 and 2002, which contributed to a dramatic current account adjustment; from 2003 to 2006, 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. 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 beginning in 2003. Brazil improved its debt profile in 2006 by shifting its debt burden toward real denominated and domestically held instruments. LULA DA SILVA restated his commitment to fiscal responsibility by maintaining the country's primary surplus during the 2006 election. Following his second inauguration, LULA DA SILVA announced a package of further economic reforms to reduce taxes and increase public investment. A major challenge will be to maintain sufficient growth to generate employment and reduce the government debt burden.
Agriculture Products
coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus; beef
Industries
textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other machinery and equipment
Industrial Production Growth Rate
3.2% (2006 est.)
Labor Force
97.77 million (2006 est.)
Electricity production
396.4 billion kWh (2005)
Electricity Consumption
368.5 billion kWh (2005)
Electricity Exports
160 million kWh (2005)
Electricity Imports
39.2 billion kWh; note - supplied by Paraguay (2005)
Unemployment Rate
9.6% (2006 est.)
Population Below Poverty Line
31% (2005)
Household Income or Consumption by Percentage Share
Lowest 10%: 0.9%
Highest 10%: 44.8% (2004)
Distribution of Family Income Gini Index
56.7 (2005)
Budget
Revenues: $244 billion
Expenditures: $219.9 billion (FY07)
Public Debt
46% of GDP (2006 est.)
Commercial Bank Prime Lending Rate
Market Value of Publicly Traded Shares
$711.1 billion (2006)
Reserves of Foreign Exchange and Gold
$87.27 billion (January 2007 est.)
Debt External
$191.2 billion (2006 est.)
Stock of Direct Foreign Investment at Home
$214.3 billion (2006 est.)
Stock of Direct Foreign Investment Abroad
$99.99 billion (2006 est.)
Exchange Rates
reals per US dollar - 2.1761 (2006), 2.4344 (2005), 2.9251 (2004), 3.0771 (2003), 2.9208 (2002)
