Lots Of Reasons To Love Brazil Again

Brazil continues to impress as a country and economy, due in no small way to its government�s multi-year efforts and determination to make it an important global presence.

Brazil is the fifth largest country in the world by geographical area and population (190 million), and now has the sixth largest economy, having surpassed the United Kingdom last year.

It�s long been known for its dirt-poor city slums, which are appalling. But its booming economy of recent years has increased the purchasing power of its population and moved an estimated 20 million out of poverty, with the majority of the population now in the middle class for the first time ever.

The increasing purchasing power of its population, and pent-up demand for goods, is an important factor in its solid economy and relative protection from the woes of the world.

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The country is blessed with an abundance of natural resources, including huge and growing reserves of oil and gas, is the world�s largest producer of sugarcane, coffee, and tropical fruit, and has the largest commercial cattle herd.

Yet exports account for only 14% of its economy, which should leave it less affected by threatening economic slowdowns in Asia and Europe.

Manufacturing, including automobiles, steel, petrochemicals, computers, aircraft and consumer durables, account for 31% of GDP. Agriculture, construction, and services, including healthcare, banking, insurance, retailing, etc., account for the rest.

Over the years Brazil�s government has undertaken several timely measures that are probably the envy of many global central banks. Among them, the Brazilian government strived to pay off debts before the credit crisis hit.

Although its stock market plunged with the rest of the world in 2008, Brazil�s economy experienced solid performance during the global financial crisis and a strong and early recovery.

The result was that in 2010, while Europe and the U.S. were just beginning to anemically recover from the �Great Recession�, Brazil�s economy was already over-heated, humming along at 7.5% growth. Taking quick action, Brazil�s government began aggressive measures, including raising interest rates, to slow the growth to a more sustainable level, and did so, with economists expecting its GDP growth slowed to 3% or so in 2011.