Brazil Overview

Capital City: Brasilia

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Brazil is the 10th largest economic power in the world with a 600 billion dollars GDP. The restrictive monetary and budgetary policies set up by the Lula da Silva government, have restored markets confidence but have restrained growth : GDP growth rate was 0.5% in 2003, 5.2% in 2004 and 3.3 in 2005. The growth was especially due to the depreciation of the Real which stimulates Brazilian exports. The FMI forecasts a 3.5% growth in 2006. Nevertheless, Brazil remains heavily in debt to the extend of putting a brake on the country's development. The inflation rate was 5.3% in 2004 and should be 4.7% in 2004.

The country holds abundant natural resources and its economy is relatively diversified. Brazil is a huge agricultural power: it is the worldlargest producer of coffee, sugarcane and oranges and attracts numerous international food processing groups. Being a big industrial country, Brazil benefits from its abundant mineral resources: it is the 2nd largest exporter of iron in the world and one of the main aluminum producers. The country is now increasingly standing out in the textile, aircraft, pharmaceutical, car, steel and chemical industry sectors.

Brazil welcomes numerous direct foreign investments. The average rate of customs duty, according to MERCOSUR's Common External Tariff (between Brazil, Argentina, Uruguay and Paraguay), is 11% but imports often face numerous restrictions and surcharges. Brazil's main trade partners are the United States, Argentina, China and Germany. The country mainly imports electrical and electronic equipment, machines, hydrocarbons and vehicles.