Brazil: Economy#
Characterized by large and well-developed agricultural, mining, manufacturing, and service sectors, and a rapidly expanding middle class, Brazil's economy outweighs that of all other South American countries, and Brazil is expanding its presence in world markets. Since 2003, Brazil has steadily improved its macroeconomic stability, building up foreign reserves, and reducing its debt profile by shifting its debt burden toward real denominated and domestically held instruments. Since 2008, Brazil became a net external creditor and all three of the major ratings agencies awarded investment grade status to its debt.After strong growth in 2007 and 2008, the onset of the global financial crisis hit Brazil in 2008. Brazil experienced two quarters of recession, as global demand for Brazil's commodity-based exports dwindled and external credit dried up. However, Brazil was one of the first emerging markets to begin a recovery. In 2010, consumer and investor confidence revived and GDP growth reached 7.5%, the highest growth rate in the past 25 years. GDP growth has slowed since 2011, due to several factors, including overdependence on exports of raw commodities, low productivity, high operational costs, persistently high inflation, and low levels of investment. After reaching historic lows of 4.8% in 2014, the unemployment rate remains low, but is rising. Brazil's traditionally high level of income inequality has declined for the last 15 years.
Brazil’s fiscal and current account balances have eroded during the past four years as the government attempted to boost economic growth through targeted tax cuts for industry and incentives to spur household consumption. After winning reelection in October 2014 by a historically narrow margin, President Dilma ROUSSEFF appointed a new economic team led by Finance Minister Joaquim LEVY, who introduced a fiscal austerity package intended to restore the primary account surplus (before interest expenditures are included) to 1.2% of GDP and preserve the country's investment-grade sovereign credit rating. LEVY encountered political headwinds and an economy facing more challenges than he anticipated. The target for the primary account surplus fell to a deficit of 2%, and two of the three main credit rating agencies downgraded Brazil to "junk" status.
Brazil seeks to strengthen its workforce and its economy over the long run by imposing local content and technology transfer requirements on foreign businesses, by investing in education through social programs such as Bolsa Familia and the Brazil Science Mobility Program, and by investing in research in the areas of space, nanotechnology, healthcare, and energy.
Economic Facts#
| GDP (purchasing power parity) | $3.135 trillion (2016 est.) $3.241 trillion (2015 est.) $3.371 trillion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $1.77 trillion (2015 est.) |
| GDP - real growth rate | -3.3% (2016 est.) -3.8% (2015 est.) 0.1% (2014 est.) |
| GDP - per capita (PPP) | $15,200 (2016 est.) $15,900 (2015 est.) $16,600 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 17.2% of GDP (2016 est.) 15.9% of GDP (2015 est.) 16.7% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 62.5% government consumption: 20.6% investment in fixed capital: 15.8% investment in inventories: -0.1% exports of goods and services: 13.9% imports of goods and services: -12.7% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 6.3% industry: 21.8% services: 72% ++ (2016 est.) |
| 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% (2016 est.) |
| Labor force | 110.4 million (2016 est.) |
| Labor force - by occupation | agriculture: 15.7% industry: 13.3% services: 71% ++ (2011 est.) |
| Unemployment rate | 12.6% (2016 est.) 9% (2015 est.) |
| Population below poverty line | 21.4% note: approximately 4% of the population are below the "extreme" poverty line (2009 est.) |
| Household income or consumption by percentage share | lowest 10%: 0.8% highest 10%: 42.9% (2009 est.) |
| Distribution of family income - Gini index | 51.9 (2012) 55.3 (2001) |
| Budget | revenues: $632 billion expenditures: $677.2 billion (2016 est.) |
| Taxes and other revenues | 35.7% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -2.6% of GDP (2016 est.) |
| Public debt | 75.4% of GDP (2016 est.) 66.5% of GDP (2015 est.) |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | 8.4% (2016 est.) 9% (2015 est.) |
| Central bank discount rate | 10% (31 December 2013) 11% (31 December 2011) |
| Commercial bank prime lending rate | 47.4% (31 December 2016 est.) 43.96% (31 December 2015 est.) |
| Stock of narrow money | $107 billion (31 December 2016 est.) $85.64 billion (31 December 2015 est.) |
| Stock of broad money | $928.9 billion (31 December 2014 est.) $835.3 billion (31 December 2013 est.) |
| Stock of domestic credit | $2.076 trillion (31 December 2016 est.) $1.644 trillion (31 December 2015 est.) |
| Market value of publicly traded shares | $490.5 billion (31 December 2015 est.) $843.9 billion (31 December 2014 est.) $1.02 trillion (31 December 2013 est.) |
| Current account balance | -$14.11 billion (2016 est.) -$58.88 billion (2015 est.) |
| Exports | $189.7 billion (2016 est.) $190.1 billion (2015 est.) |
| Exports - commodities | transport equipment, iron ore, soybeans, footwear, coffee, automobiles |
| Exports - partners | China 18.6%, US 12.7%, Argentina 6.7%, Netherlands 5.3% (2015) |
| Imports | $143.9 billion (2016 est.) $172.4 billion (2015 est.) |
| Imports - commodities | machinery, electrical and transport equipment, chemical products, oil, automotive parts, electronics |
| Imports - partners | China 17.9%, US 15.6%, Germany 6.1%, Argentina 6% (2015) |
| Reserves of foreign exchange and gold | $352.1 billion (31 December 2016 est.) $356.5 billion (31 December 2015 est.) |
| Debt - external | $544.1 billion (31 December 2016 est.) $542.3 billion (31 December 2015 est.) |
| Stock of direct foreign investment - at home | $673 billion (31 December 2016 est.) $615 billion (31 December 2015 est.) |
| Stock of direct foreign investment - abroad | $295.3 billion (31 December 2016 est.) $288.5 billion (31 December 2015 est.) |
| Exchange rates | reals (BRL) per US dollar - 3.483 (2016 est.) 3.3315 (2015 est.) 3.3315 (2014 est.) 2.3535 (2013 est.) 1.95 (2012 est.) |