Brazil: Economic and Political Outline

Economic Overview

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 Sectors 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.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

56.3/100

Position:

Mostly unfree

World Rank:

108/179

Regional Rank:

18/26

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Sources of General Economic Information

Ministries

Ministry of Agriculture and Reserves (MA)
Ministry of Foreign Relations (MRE)
Institute for Mine development (INDI)
Ministry of Development, Industry and Foreign Trade
Ministry of the Economy (Fazenda)

Statistical Office

Brazilian statistics institute

Central Bank

Central Bank

Stock Exchange

Rio de Janeiro Stock Exchange
São Paulo Stock Exchange

Other Useful Resources

Economic statistics

Main Online Newspapers

Folha de São Paulo
Estado de São Paulo
Jornal do Brasil
On-line economic journal
Jornal do Commercio

Economic Portals

Economic Portal-Brazil

Political Outline

Type of State

A federal republic based on parliamentary democracy. The Brazilian constitution gives extensive powers to the government.

Executive Power

The president is both Head of State and Head of the Government; he holds executive power. He (and the vice-president) is elected by universal suffrage for a four year term. He appoints the Council of Ministers.

Legislative Power

The legislative power is bicameral. The parliament, called National Congress, is made up of two houses: the Senate (upper house), which has 81 members (3 members for each of the 26 provinces and for the federal district, elected according to the majority principle, for an 8 year term) ; and the Chamber of Deputies (lower house), which has 513 seats (and whose members are elected by proportional representation for a four year term). Each of the 26 States, and the federal district of Brazilia, has a separate legislature and administration. Brazilians enjoy considerable political rights.

Main Political Parties

Fifteen political parties are represented in the National Congress. As it frequently happens that a politician changes parties, the proportion of seats of a given party in Congress changes regularly. The main political parties are as follows:
- The PT (Workers' Party, center-left)
- The Democrats
- The PMDB(Brazilian Democratic Movement Party, center)
- The PSDB (Brazilian Social Democratic Party, center-left)
- The PCdoB ( Brazilian Communist Party, left-wing)

Current Political Leaders

President: Dilma ROUSSEFF (since 1 January 2011) – PT
Vice President: Michel Temer (since 1 January 2011) - PT

Next Election Dates

Presidential: October 2014
Legislative: October 2014
Senate : October 2014 (for 1/3 of the members)

Indicator of Freedom of the Press

World Rank:

99/179

Evolution:

41 places down compared to 2010

Source: Worldwide Press Freedom Index 2010, Reporters Without Borders

Indicator of Political Freedom

Ranking:

Free

Political Freedom:

2/7

Civil Liberties:

2/7

Map of freedom 2010