new brazil super economic powers in final)

8/6/2019 New Brazil Super Economic Powers in Final)

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Super Economic Powers in 2030

MNCF

Ashutosh Y- 8

Ka aljit

R- 7a jay - 54

Yatish D- 65

Gaga d M- 5


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WILL BRAZIL B COM AN CONOMIC

U R OWER?


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Brazil : Country overview

Geogra hy

Full ountry na e: Federative Republic of Brazil

opulation: 187 million

Bo

rder

ountri

es:Argentina, Bolivia, Colombia, FrenchGuiana, Guyana, Paraguay, Peru, Suriname, Uruguay and

Venezuela.

Cli ate: mainly tropical, with variations from seasonaldrought in the north east and seasonal rainfall in central

regions. Terrain: varied, includes hills, mountains, plains and

highlands. The Southern part of the country is a ruggedterrain in comparison to the North. Brazil consists of a dense

complex of rivers, including the Amazon.


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Economy and Finance Currency: the real

Typeofeconomy: capitalist

Healthofeconomy: Brazil is an emerging economy whichhas been affected by the global economic downturn.

Unemployment rate: 6.1% (February 2011)

Mainexports: transport equipment, iron ore, soybeans,coffee, automobiles.


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Culture People: the population in Brazil is diverse with a history of

immigrants from countries such as Portugal, Spain, Syriaand Japan. Brazilians of mainly European descent account

for more than half the population, although people of mixedethnic backgrounds form an increasingly larger segment.

Major religion:

Roman Catholicism (73.6%), Protestant (15.4%) and other(11%).

Language: the principal language in Brazil is Portuguese,although Spanish, French and English are also spoken.There are also around 170 languages spoken by the 200 orso indigenous tribes


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Politics

Typeofgovernment: federal republic government. TheRepblica Federativa do Brasil (Brazils official title) is madeup of 26 administrative states.

Majorpolitical parties: Workers Party, BrazilianDemocratic Movement Party, Brazilian Social DemocraticParty and Democrats.


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QUICK FACT OF BRAZIL :-

Name: Federative Republic of BrazilPopulation: 187 million (2010)Capital: BrasiliaLargestcity: Sao Paulo

Othercities: Rio de Janeiro, Salvador, Belo Horizonte,RecifeArea: 3.3 million sq milesCurrency: RealGNIpercapita : US$7,770

Mainexports: transport equipment, iron ore, soybeans,footwear, coffee, autosLanguage: PortugueseReligion: Roman Catholic (74%)Lifeexpectancy: 69 years (men), 76 years (women)


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QUICK FACT OF BRAZIL :-

2010

Population growth (annual %) 1

Life expectancy at birth, total (years) 72

Mortality rate, infant (per 1,000 live births) 18GNI (current US$) (billions) 1598.8

GNI per capita, (current US$) 7770

Unemployment, total (% of total labor force) 6.1

External debt stocks (% of GNI) 16

Literacy rate, adult female (% of females ages

15 and above)90

Literacy rate, adult male (% of males ages 15

and above) 90


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BRAZILISANIMPRESSIVEPLAYER ON

WORLD MARKETS

Brazil is the Worlds largest exporter of coffee, which is wellknown

Brazil is also, which is less well known, the Worlds largestexporter of:

Soya Meat & Chicken

Leather

Sugarcane & Fruit Juices

Brazil is the Worlds largest producer of bio-ethanol, withover 300 plants producing some 18 billion liters annually

Brazil is the Worlds largest producer of iron ore

Brazil is a net exporter of oil

Of the energy that Brazil consumes, some 45% comes from


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BRAZILECONOMY:-

BRAZIL IS THE WORLDS MOST DIVERSIFIEDCOMMODITY PRODUCER WITH A WIDE RANGE OFMETALS AND AGRICULTURAL PRODUCTS


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BRAZILECONOMY:-

AND IT IS ALSO THE MOST DIVERSIFIEDINDUSTRIAL COUNTRY AMONG EMERGING MARKETS


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BRAZILECONOMY:-

BRAZIL IS THE 10TH LARGEST ECONOMY IN THEWORLD

GDP (USD trillion), 2010


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BRAZILECONOMY:-

AND IT IS THE 5TH MOST POPULOUS COUNTRY INTHE WORLD

Population (million), 2010


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BRAZILECONOMY:-

BRAZIL HAS BEEN RUNNING RESPONSIBLE ECONOMICPOLICIES WITH FISCAL SURPLUSES FOR OVER 15YEARS

Primary fiscal balance (% of GDP)


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BRAZILECONOMY:-

WHICH HAS LEAD TO ECONOMIC STABILITY ANDLOW INFLATION

Consumer-price inflation (%)


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BRAZILECONOMY:-

GDP growth rate (%, in real terms)


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BRAZILECONOMY:-

BRAZILIAN INTERNATIONAL TRADE HAS BEENGROWING FAST, AS THE COUNTRY IS OPENING UP

International trade (USD billion)


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BRAZILECONOMY:-

BRAZIL HAS SEEN A SHARP REDUCTION IN POVERTYOVER THE PAST 15 YEARS

Poverty (% of total population)


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BRAZIL GROSS DOMESTIC

GROWTH:-

Brazil GDP =1572 billion USD or 2.54% of the world economy(Feb 2011).

GDPAnnual Growth ( 1 v/s 11) ((157 -

149 )/149 )=5. 9%)


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BRAZIL GDPANNUAL GROWTH

RATE:-

The Gross Domestic Product (GDP) in Brazil expanded 5% inthe fourth quarter of 2010 over the same quarter, previousyear. GDP is increasing by 5.29% YOY.


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Brazil BalanceofTrade

Brazil reported a trade surplus equivalent to 1199 MillionUSD in February of 2011. Brazil has an export-orientedeconomy. The main exports are transport equipment, ironore, industrial raw materials, soybeans, footwear, coffee,

autos, automotive parts, machinery. Brazil importsmachinery, electrical and transport equipment, chemicalproducts, automotive part and electronics.


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Brazil Import

Brazil imports were worth 15.5 Billion USD in February of2011. Brazil imports machinery, electrical and transportequipment, chemical products, automotive part andelectronics. Brazils main import partners are European

Union, United States, China and Argentina.


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Brazil CurrentAccount

Brazil reported a current account deficit equivalent to (-5410)Million USD in January 2011.


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Brazil Inflation Rate

The inflation rate in Brazil was last reported at 6.01 percentin February of 2011..


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Brazil Interest Rate

The benchmark interest rate in Brazil was last reported at11.75 percent. From 1999 until 2010, Brazil's averageinterest rate was 17.22 percent reaching an historical high of45.00 percent in March of 1999 and a record low of 8.75

percent in July of 2009


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Brazil Unemployment Rate

The unemployment rate in Brazil was last reported at 6.1percent in January of 2011. From 2001 until 2010, Brazil'sUnemployment Rate averaged 9.95 percent reaching anhistorical high of 13.10 percent in August of 2003 and a

record low of 6.80 percent in December of 2008.


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Brazil - IMF Data & Forecasts

2010 2015 Scale UnitsBrazil GDP at constantprices 1434.44 1753.6 Billions Brazilian Real

Brazil percent change inGDP at constant prices 5.5 4.1

Percentchange

Brazil GDP per Capita atconstant prices 7422.59 8790.33 Units Brazilian Real

Brazil ConsumerPrices Index average 5.1 4.53

Percentchange

Brazil Currentaccount balance inpercent of GDP -2.91 -3.19

Percent ofGDP

Brazil GDP based onPurchasing Power Parity(PPP) valuation ofcountry GDP 2138.45 2856.64 Billions

Currentinternational

dollar


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Brazil - IMF Data & Forecasts

Year Country

Interest

Rate

Growth

Rate

Inflatio

n Rate

Jobless

Rate

Current

Account

2011 Brazil 11.25% 0.70% 6.01% 6.10% -5410

2020 Brazil5.00% 7.00% 2.00% 2.00% Surplus


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Brazil Among theWorldsNext

SuperPower

1. Self-Sustainability

In the next ten years, Brazil will be one of the most self-sustainable economies in the world. They have an extensiveagriculture and natural resources infrastructure (some

farmers enjoy three separate harvests a year), as well as theland space to scale with a growing population. Unlike China,or most of the world, they dont have to depend onexpensive, price-varying imports.

2. Natural Resources

In late 2007, the worlds largest deep-water oil field wasdiscovered off the southeastern coast of Brazil, estimated tocontain some five billion to eight billion barrels of crude oiland natural gas.


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SuperPower

This discovery has put Brazil in the discussion of majorenergy exporters, and has given growth structure to theiralready-expanding economy. Their currency is now stronger(growing 34% against the dollar in 2009), investment is

increasing (foreign direct investment was up 30% in 2009),and both are now built upon a stronger foundation.

3. Size

Size matters. When it comes to landmass, Brazil is the 5thlargest country in the world. Their GDP ranks at #10 in theworld, projected to climb to the top five within approximatelyfive years. It holds the worlds largest supply of freshwater,and the worlds largest tropical forests.


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SuperPower

4. Sporting EventsBrazil will host the World Cup in 2014, and the Olympics in2016. The effect of these events is partly symbolic achance to showcase their country to the world but also

economic in nature.The World Cup and Olympics will bring tens of billions of dollars into Brazil, not only in a one-time economic surge,but in the form of new infrastructure that will exist for decades to follow. The sporting events are coming at the

exact right time for Brazil.5. Nowarsorenemies

Only 25 years ago, Brazil was a military dictatorship. Butsince that time, Brazil has avoided military conflict. This of

course is in stark contrast to the United States, where we


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SuperPower

6. High interest ratesAs I have stated, I am truly afraid of the American economicsystem that now has interest rates pegged at zero. I believethat the countries that have the highest interest rates will

fare the best during the economic melt down. High interestrates also encourage savings rather spending. Furthermore,high interest rates can be lowered to provide an economicstimulus for the economy.

I have been very fortunate and have been moving down

large percentages of my savings into the equivalent ofBrazilian T-bills. When I first purchased my apartment in2003, interest rates were sitting at 20%. Since that time, ithas dropped to 13% in 2008 and 9% in 2009. That said, I

am much happier making 9% on my money here in Brazilthan 0% in the United States.


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SuperPower

8. Leading producerofEthanol & GasolineBrazil is also the worlds largest exporter of ethanol. Brazilhas always been energy independent. More importantly, allof Brazils cars are manufactured to burn both ethanol and

gasoline. Furthermore, the countrys infrastructure is alreadyset up so that all gas stations handle both alcohol andgasoline. Note: ethanol is always about 30% cheaper thangasoline.

9. Military: Brazil armed forces are the largest in South

America Continent with more than 371,000 active troops andofficers which is controlled by President on country. With nothreats from its neighbors, its forces are mainly involved incivic programs like road construction, education, healthcare

etc. Brazil forces have also worked as peace keeper underUnited Nation around the world.


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Outlook:-

The outlook for the Brazilian economy is positive. Over theshort-term, downside risks are associated with a rapiddeterioration in the current account balance that leave thecountry more exposed to adverse financial conditions. The

government also needs to prevent the formation of assetbubbles in the economy. In the medium-term, both privateand public consumption will continue to grow faster thanGDP, posing pressures on domestic production capacity andprices. More investment will be needed to keep up with

increasing domestic demand. Some structural reforms needto be undertaken to ensure sustainable growth and improvefiscal accounts. The FIFA World Cup and the Olympics willoffer excellent opportunities for exporters and investors inBrazil over the next 5-7 years.


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Risk Factor:-

Political Violence :-The main source of violence in Brazil is criminal rather thanpolitical. Personal security is poor as there is an extremelyhigh rate of criminal activity in major cities, where 25% of thepopulation is believed to live in favelas orshantytowns.An imbalance in land distribution leads to episodic violencein rural areas, specifically in the Amazon. Land invasions arecommon and mostly affect the agriculture sector, althoughthe scope of land so targeted is broadening. Protests by

groups of landless individuals known as the LandlessWorkers Movement (MST) highlight the issue.


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Risk Factor:-

Investment Environment:-Weak regulation and cumbersome bureaucracy arehallmarks. According to the World Banks 2010 DoingBusiness survey, starting a business in Brazil takes 120days against a regional average of45.5 days, an example ofwhat is widely referred to as the Brazil Cost of doingbusiness in the country. The judicial system is regarded asfair, but slow and complex.General Political Environment :-

Brazilian politics are characterized by a fractiousness thatmirrors the countrys diverse socio-economic make-up.Relations are generally difficult between the executive andthe legislature, as well as between federal and stategovernments. In addition, a tradition of switching parties hasmade party politics and political strength in Congress fluid.


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new brazil super economic powers in final)

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