Brazil

Capital: Brasilia

Local time:
It is %T:%M %A in Recife, Brasilia, Rio, Sao Paulo, Porto Alegre
It is %T:%M %A in Salvador, Fortaleza
It is %T:%M %A in Manaus

GDP growth rate: 4.2% in 2013

FDI stock: 472 579 million USD in 2010

Economic trends

Brazil is the sixth largest global economy in terms of GDP, ranking ahead of countries like the United Kingdom, Italy, Canada and Spain. Prudent fiscal and monetary policies, coupled with the necessary microeconomic reforms, have given the Brazilian economy a strong basis, which has enabled it to weather the global economic crisis. The Brazilian economy has returned to robust growth in 2010, driven by the recovery of foreign trade and supported by stimulus policies. With its growth estimated at 7.5% of GDP, it is the fastest growing country in Latin America. In 2011, GDP growth declined slightly to 3.8%, due to the worsening international environment, including the financial fragility in Europe and the further slowing down of Chinese industry, China being one of Brazil's main trading partners.

President Dilma Rousseff, elected in October 2010, is committed to continuing the policy of her predecessor, former President Lula. The Plan for accelerated growth includes, among other measures, an extensive program of credit support and financing of investments and long-term fiscal measures. The government also aims to reduce public debt, which amounts to more than 60% of GDP.

Despite the good economic performance, there are still significant social problems. The country remains one of the most unequal in the world. There are large regional differences and crime and criminal violence are on the rise. The unemployment rate stands at around 7% and informal work is important. Inflation too remains high, estimated at 6.6% for the year 2011.

Brazil, which will host the FIFA World Cup in 2014 and the 2016 Olympic Games, should invest heavily in infrastructure. This should help stimulate economic growth in the coming years, creating favorable conditions for employment and attracting foreign capital.

Main branches of industry

Brazil has abundant natural resources and its economy is relatively diversified.

A major agricultural power, Brazil is the world's first producer of coffee, sugar cane and oranges, as well as one of the largest producers of soy. It also attracts many world groups in the food industry and biofuels. Brazil has the world's largest commercial livestock herd. Nevertheless, agriculture's contribution to the GDP is relatively small, accounting for only 6.6%, yet the sector represents 40% of its exports. Forests cover half of the country, with the largest ombrophilous forest in the world situated in the Amazon Basin. Brazil is the world’s fourth largest exporter of timber.

Brazil is also a great industrial country. It benefits from its mineral ore wealth and is the second world exporter of iron and one of the main producers of aluminum and coal. As an oil producer, the Brazil is aiming to become self-sufficient in the near future. The country is asserting itself more and more in the textile, aeronautics, pharmacy, automobile, steel and chemical industry sectors. Most of the large automobile manufacturers have set up their production plants in the country. The industrial sector contributes more than quarter of the GDP.

The tertiary sector represents two-thirds of the GDP. In the recent years, the country has embarked on the production of high added-value services, especially in the fields of aeronautics and telecommunications.

International trade

Although foreign trade only represents a quarter of its GDP, Brazil is amongst the 20 top world exporters and has enormous economic potential. The country's main trade partners are China, the United States, the countries of the Mercosur (Common South American market which encompasses Argentina, Brazil, Paraguay and Uruguay) and the EU. Brazil’s trade deficit is a surplus.

In 2011, the country recorded a trade surplus of around 30 billion USD, an increase of almost 50% over 2010. Exports of goods increased by 26.8% to USD 256 billion while imports rose 25.7% to 226 billion USD. This is Brazil's largest trade surplus since 2007. In the recent years, the country has benefited from strong global demand for soybeans and iron ore, which are among its leading exports. In addition, the Brazilian government has implemented tax incentives to promote exports.