Brazil is the largest country (in area and population) in Latin America and the Caribbean and one of the most economically advantaged countries in the world. In 2007 had the 9th world Gross Domestic Product measured by purchasing power parity. Brazil has immense natural resources and a strong industrial development and its national economy is characterized by large and well-developed agricultural, mining, manufacturing, and service sectors. From 2003 to 2007, Brazil ran record trade surpluses and recorded its first current account surpluses since 1992. Brazil experienced in the 1990s a significant and extended period of stability and economical growth. The main reasons behind this were the macroeconomic and social policies that the Brazilian authorities adopted. The aforementioned situation resulted in the creation of a shield for the Brazilian economy that managed to weather the global financial crisis with relatively minor impacts. The country was one of the last to go into recession in 2008 and among the first to resume growth in 2009.
Brazil showed a considerable degree of resilience to the global economical turmoil that was triggered by the economical financial recession. An important structural measure that helped the country to overcome the crisis with “flying colours” was the Growth Acceleration Plan that the Brazilian government adopted in 2007. The main objective was to increase investment in infrastructure and provide tax incentives to encourage faster and more robust economic growth. The Plan should largely be regarded as successful as it is credited as one of the major factors behind the country’s 5.1% growth in 2008 and its quick recovery from the crisis.
Additionally, the intensification of growth in the Brazilian economy was mainly created by the growing dynamics of the domestic demand. This phenomenon is evident both in significant increases in investment levels and in expanding household consumption. This reinforced the national economy of Brazil against external pressure, as the driving force behind development is internal and not external.
Of course, the fact that the main economic stimulation of the Brazilian economy is internal consumption does not necessary means that it is an isolated economy. In the contrary, Brazil is an important international player in the field of economics a fact that is highlighted by its membership in several economic organizations, such as Mercosur, SACN, G8+5 and G20 Another indicator of the fact that delineates the developing trend of the Brazilian economy is that according to the World Economic Forum, Brazil was the top country in upward evolution of competitiveness in 2009, gaining (8) positions among other countries, overcoming Russia for the first time and partially closing the competitiveness gap with India and China among the fast-growing developing economies.
The immense economical development of Brazil has not eradicated completely the social problems and inequalities of the country as a wide gap between rich and poor still remains. Nevertheless, Brazilian government is constantly trying to reach this gap. In 2002, Luiz Inácio Lula da Silva was elected president promising social reforms that intended to lift millions of Brazilians from poverty, create jobs and income. The aforementioned objective was partially reached as the innovative social programs taken by the government of President Luiz Inácio Lula da Silva have been gradually decreasing social inequality. An indicative is that unemployment had decreased from 12,3% that it was in 2003 to 7,7% in September 2009.
Of course, there is still a lot of distance to cover in order to fully eradicate social inequalities as the country still experiences extreme regional differences, especially regarding health, infant mortality and nutrition indicators and the aforementioned indicators are more intensive in the poorer North and Northeastern regions than in the richer South and Southeast areas. Economical growth and stability are the two main indicators of the Brazilian socio-economical status quo. Though, strong social inequalities still remain at relatively high levels and undoubtedly this is a problem that should be resolved by the Brazilian government.
