1. Brazil: Sustainable Growth, income distribution and social inclusion Miami Minister Paulo Bernardo April 6th, 2008

2. Brazil is consolidating a mass consuption market and promoting the ressurgence of a new middle class Faster growth and lower unemployment have fueled higher consumer spending and investment. Unemployment rate fell from 13% in 2002 to 7,4% in 2007 Investment rate increased from 15,3% to 17,3% of GDP in four years In 2007, sales expanded by 10%.

3. 20062007 GDP3,85,4 Family consuption 4,66,5 Government consuption 2,83,1 Investment10,013,4 Exports4,76,6 Imports (-)18,320,7 19 consecutive quarters of Growth Source: IBGE Index number (2003.II =100)

4. GDP Components – annual growth rate % Source: IBGE In this new cycle, growth has its pillars in sustainable domestic demand

5. Credit level increased Source: Central Bank Credit - % of GDP

6. 29,9% in 9 years 37,2% in 5 years Recovering the purchase power of the minimum wage Source: DIEESE 2006 R$ Increase in real terms

7. The recovery of Wage Bill Source: DIEESE 2000 = 100 Index number

8. The result is an impressive growth on sales and consumption... Sale of Electronic and IT goods => 25,8% increase in 2007 Production of capital goods => 18,5% in 2007. Automotive Industry => 100% Sale increase in 4 years Sale of Durable Goods => 33% increase in 4 years Production of Cement => 20,7% increase in 5 years

9. Real Estate Expansion Source: SBPE Housing – Real Estante Financing Unity R$ millions

10. Since 2003, the largest corporations are improving their results 500largest corporations - Profit (US$ Bi) 500 largest corporations - Revenue (US$ Bi) Source: Exame Magazine

11. Investment is the backbone of the Sustainable Cycle Source: IBGE % of GDP

12. Industrial Production and Investment Source: IBGE Accumulated Growth base: jan/06 29,9 10,2

13. Fostering Sustainable Growth allows Brazil to face the social challenge...

14. Source: FGV/PNAD/IBGE Growth is Reducing Poverty and Income Inequality... % of population under poverty line Gini Index

15. ... and reducing unemployment Source: IBGE 7,4% %

16. BOLSA FAMÍLIA – An anti-poverty program invnted in Latin America is winning converts worldwide – The Economist (february 2008) 11 millions families now receive the benefit. The program has also helped to push the rate of economic growth in the poorest regions above the national average. Strong impact on food consumption and school enrollment Social inclusion: 25% of the population are enrolled on conditional cash transfer programs

17. Sound Fundamentals and Economic Growth for the Rise in Investments

18. Source: Central Bank Sustained commitments to sound fiscal policies yields its results. Public Sector Net Debt (% of GDP)

19. Exchange index Fixed Rate Price index Selic Debt has a different profile... Source: Central Bank Duration % months

20. ... and inflation is under control target

21. External Sector – Reduction of the External Vulnerabilities

22. Brazil is now much less vulnerable to international turbulences it was in the past, because: Foreign direct investment is strong; Several consecutive years of aggressive export expansion; Diversification of markets (INSERIR DADOS NOS COMETÁRIOS) Increase in international reserves; Better external indebtedness indicators;

23. Brazil has been running a sound trade Balance Surplus Source: Ministry of Industry and Commerce US$ billion

24. Increase in Foreign Direct Investment Source: Central Bank Lula Privatization

25. New Challenges Ahead

26. The Brazilian Agenda Tax Reform Infrastructure PAC New Industrial Policy Efficiency in Public Management