The Brazilian economy is the largest economy in Latin America and the 6th largest economy in the world. The country is the largest by landmass in South America and is home to approximately 2.1 million people. Brazil is well-known for its agriculture and food industry. Agriculture represents 5.5% of the Brazilian economy and employs 15% of the workforce, approximately 10 million people.
Brazil’s economy is relatively new in terms of its strength within the international market place. Although the country did not begin its industrial growth until the late 19th century, it has grown increasingly, making it a globally relevant market. The country can be broken down by three main industries in terms of GDP: Agriculture (5.5%), industry (28.7%), and services (65.8%). The labor force of Brazil consists of 1.4 million people and growing.
Additionally, it is a part of BRICS, the five major emerging national economies: Brazil, Russia, India, China, and South Africa. The agreement gave the country new international recognition and influence.
Brazil has abundant natural resources, including iron, bauxite, copper and gold. These minerals account for 20% of the country’s exports. Iron alone makes up for 15% of the minerals exported. The mining and metal industry in Brazil is heavily connected to the worldwide construction industry.
The automotive industry in Brazil is on the rise, with well-known companies like Fiat, Volkswagen, and GM claiming a piece of the developing automotive trade in the country. Market protection in the form of tariffs and quotas on imports has prompted more companies to open and expand to support the local economy.
Brazil is often referred to as the food basket of the world, with many products being produced in the country. The biggest export is Sugar cane and is 6.5% of the overall exports. This industry is one of the fastest growing sectors in Brazil, growing at a rate of 9.6% annually.
In recent years Brazil has suffered from an economic recession. However, due to the increase of production of large companies, Brazil is now in a period of economic stability. The industrial production has stopped falling and investment intentions are on the rise. The country is expected to have a booming growth and see an overall increase in economic progress.
Recently, the country has introduced and will implement a new fiscal rule. In combination with a planned reform of pensions and social benefits, Brazil’s fiscal sustainability will be strengthened. The reforms have the ability to lead to strong declines in income inequality, effecting production costs. For several years the country has been viewed as an “emerging market” with high potential. As Brazil implements new reforms and continues to build a stable economy it will bring new opportunities for future investors and businesses.
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