1. NS4540 Winter Term 2019 Brazilian Economy Overview
Europa brazil economy

2. Macroeconomic Trends

3. Brazil Strenghts/Weaknesses

4. Brazil: Governance Trends

5. Brazil: Economic Freedom Trends

6. Brazil: Recent Growth Patterns

7. Brazil GDP Forecast

8. Brazil Fiscal Deficit/Debt

9. Brazil: Economic Size

10. Brazil: Population

11. Brazil: Unfavorable Demographics

12. Brazil: Service Based Economy

13. Brazil: Limited Openness

14. Brazil Minimum Wage

15. Brazil Labor Productivity

16. Brazil: FDI

17. Brazil: Poverty Decline

18. Brazil Unemployment

19. Brazil: Income Distribution

20. Overview I Brazil is the sixth largest economy in the world
The world’s second largest emerging market
Agricultural production and export of raw materials has historically played a prominent role in Brazil’s economy
However Brazil was one of the earliest industrial powers in Latin America
Coffee production in Brazil in the 19th century resulted in concentration of income in hands of Sao Paulo landed Class
They favored a more diverse investment portfolio
Coffee profits went into transportation and other industrial and commercial enterprises

21. Overview II
Young industries received further boost from interruption of trade during First and Second World Wars – protection
Early as 1947 manufacturing sector had displaced agriculture as country’s principle sector
However manufacturers did not comprise a significant proportion of Brazilian exports until last quarter of 20th century
Although initially dominated by resource-based products– processed foods composition of exports has shifted reflecting technological upgrading of national industries
Sophisticated heavy manufacturers
Telecommunications
Automobiles and aircraft

22. Overview III
As with many countries, consistent economic growth and macroeconomic stability has eluded Brazil, especially in 20th century
However by the first decade of the 21st century Brazilian economy was growing at a record pace of 4.5% per year
This economic growth has been accompanied by equally remarkable improvements in living standards and significant achievements in socio-economic areas
Poverty reduction
Improved literacy
Increased life expectancy

23. Overview IV
These advances in area of human welfare stem from foundation in basic health and education that was constructed in period on inward growth in mid 20th century -- especially
Plan of President Vargas ( ) for industrialization, and
The intensive social welfare programs – Bolsa Familia initiative during 1990s and early 2000s
Shift in Brazilian economic paradigm from inward looking, state-led model of growth – characteristic of region in mid-20the century
Prompted by chronic and hyperinflation from 1980s into the early 1990s

24. Overview V
Hyper inflation generated political capital needed to push through market-oriented reforms
Initiated under President Collor de Mello ( ) and
Strengthened under President Cardoso ( )
Dissatisfaction with fiscal austerity and income and social inequality grew culminating with
Lula de Silva in 2002 and 2006 and
Dilma Rousseff in 2010 and 2014
Concerns that Lula and Rousseff administrations would reverse market-friendly policies proved unfounded
Pragmatism has increasingly characterized Brazil economic policy making regardless of underlying political ideology

25. Overview VI Brazil’s economy in 21st century could be described as
Hybridization of interventionist and free market approaches made possible by Brazil’s large market size
Policy framework has elements that are both export-oriented and foreign investment friendly
Also inward looking and protective of domestic industries.
Fiscal policy favors counter-cyclical stimulus measures
But with a concern for inflation and the exchange rate.
Economic growth is regarded as the means to social ends
Broader access to better education and health
Reduction in poverty and destitution and
Environmental protection and conservation

26. Overview VII
Record prices world markets for primary commodities led to an abundance of foreign reserves in Brazil in 2004
Gave fiscal and monetary authorities enormous policy space
Even when global markets were ensnarled by financial crisis in growing domestic consumer market made it possible for fiscal authorities to delay the immediate effects of the external shock and maintain spending priorities
However, the confluence of
a protracted recovery of global markets
falling world commodity prices, and
worsening macroeconomic conditions
Pressing government towards greater fiscal restraint after four years of economic stimulus measures.