BRAZIL MacroeconomicsECON224-1104B-22Prof. Hector Morales Victoria Rock December 4, 2011
INTRODUCTIONAs an employee of the World Bank, I have been asked to research an economic concern in aSouth American Country. I have chosen Brazil for this research and will discuss the GrossDomestic Product (GDP) and their situation.
BRAZIL Brazil, located along the Atlantic Ocean in South America, is the fifth largest country in theworld and the seventh largest economy at market exchange rates as well as the eighth largestin purchasing power. In 2007 they launched a four-year plan to spend $300 billion in order tomodernize its roads, power plants, and ports. (Brazil, 2011) Unlike most countries, Braziliansneed to know who they are doing business with before they can work effectively. They preferface-to-face meeting instead of written communication because it allows them the chance toknow the person they are doing business with. However Brazilians insist on drawing updetailed legal contracts. To a Brazilian, the individual they deal with is more important than thecountry. Since this is a group culture, it is important that you do not do anything to embarrassa Brazilian. (Brazil - Language, Culture, Customs and Etiquette, 2011) GROSS DOMESTIC PRODUCT (GDP) The Gross Domestic Product, (GDP), is one of the measures of national income and input fora given country’s economy. GDP is sometimes regarded as the sum of profits added at everylevel of production, the intermediate stage, of all final goods and services produced within acountry at a stipulated time frame and it is rarely given monetary value. (Gross domesticproduct, 2011) The basic formula for calculating the GDP is; Y=C+I+E+G Y= GDP C= Consumer Spending I= Investment made by industry E= Excess of Exports over Imports G= Government Spending (Calculating GDP, 2011)
BRAZILS SITUATION According to the World Fact book put out by the CIA, “Since 2003, Brazil has steadilyimproved macroeconomics stability, building up foreign reserves, reducing its debt profile byshifting its debt burden toward real denominated and domestically held instruments, adheringto an inflation target, and committing to fiscal responsibility. In 2008, Brazil became a netexternal creditor and two ratings agencies awarded investment grade states to its debt.” Whenthe onset of the global financial crisis in September of 2008, Brazil’s currency and stock marketsaw large swings as foreign investors pulled their resources out of Brazil. Although theyexperienced two quarters of recession, they were one of the first markets to begin a recovery.With consumer and investor confidence revived and GDP growth returned to positive, theCentral Bank expects growth to continue. (The World Factbook, 2011) BRAZIL’S GDP (In US Dollars, 2010)GDP 2010 2009 2008 COUNTRY COMPARISON TO THE WORLDPURCHASING $2,172 TRILLION $2,021 TRILLION $2,034 TRILLION 9 (2010)POWER PARITYREAL GROWTH 7.5% -0.6% 5.2% 30 (2010)RATEPER CAPITA (PPP) $10,800 $10,200 $10,400 102 (2010)COMPOSITION AGRICULTURE: INDUSTRY: SERVICES: 67.4%BY SECTOR 5.8% (2010) 28.8% (2010) (2010)
BRAZIL’S GDP IN COMPARISON TO OTHER SOUTH AMERICAN COUNTRIES
CONCLUSION Brazil forms a major part of South American markets and is the largest economy on the basisof absolute GDP. The Brazilian economy’s solid performance during the financial crisis and itsstrong and early recovery has contributed to the country’s transition from a regional to a globalpower.
REFERENCEBrazil - Language, Culture, Customs and Etiquette. (2011, December 2). Retrieved from Kwintessential: http://www.kwintessential.co.uk/resources/global-etiquette/brazil-country-profile.htmlBrazil. (2011, December 2). Retrieved from Wikipedia: http://en.wikipedia.org/wiki/BrazilCalculating GDP. (2011, December 3). Retrieved from MindTool: http://mindtools.net/GlobCourse/formula.shtmlEconomy of South America. (2011, December 3). Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Economy_of_South_America#Annual_economic_growthGross domestic product. (2011, December 3). Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Gross_domestic_productThe World Factbook. (2011, November 15). Retrieved from Central Intelligency Agency: https://www.cia.gov/library/publications/the-world-factbook/geos/br.html