Economy of Brazil

Overview

The economy of Brazil is the ninth largest in the world as measured in purchasing power parity with GDP surpassing a trillion dollar in 2006. Brazil has developed into an upper middle-income nation and is also the only country in Latin America to be a member of the BRIC. The economy of Brazil is characterized by large well-developed agricultural, mining, manufacturing, and service sectors.

The economy of Brazil was under critical stress in 2002 with election uncertainties and sharp currency depreciation has led to the dramatic present account adjustment.

Brazil has enjoyed sustained economic growth since the year 2004, which has increased the rate of employment and real wages. In spite of good economic management, some problems still persist. The domestic debt increased gradually from 1994 to 2003, thus straining government finances. In 2006, the country's debt profile improved by moving its debt burden to real denominated and domestically held instruments.

The major economics cities of Brazil are Rio de Janeiro Sao Paulo, Belo Horizonte and Manaus. Majority of the large industries are in the south and southeast while the northeast is the least affluent part of Brazil. Nevertheless the northeast is also beginning to attract new investment.

Major Economic Sectors

Agriculture

The agricultural sector of Brazil is well diversified, with a wide variety of resources and the country is mostly self-sufficient in food. The country is the largest producer of sugarcane and coffee in the world and also an exporter of cocoa, orange juice, soybeans, tobacco, forest products, and other tropical fruits and nuts.

In several parts of Brazil, livestock production is also important and there has been a fast growth in the pork, poultry, and milk industries indicating changes in consumer tastes.

The Agricultural sector of Brazil accounted for 8% of the country's GDP in 2006, and employed 20% of the labor force in over 6 million agricultural enterprises.

Industries

Brazil's major industries are mostly centered in the south and south east, although the north east is also attracting new investments in recent years. The industrial sector in Brazil is the most advanced in Latin America which accounted for 38% of the country's GDP in 2006. The wide variety of industries in Brazil are steel, automobiles, petrochemicals, computers, aircraft, and consumer durables.

The increased economic stability in Brazil, have led to several multinational businesses investing heavily in new equipment and technology.

Services Sector

There is a diverse and services sector in Brazil which accounted for 54% of the country's GDP in the year 2006 and employed 66% of the workforce. The services sector includes mail, telecommunications, banking, energy, commerce, and computing.

 

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