Economic Development of Brazil

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Basic Overview of Development1

Current Economic Profile2

Brazilian Economy in 20132

GDP grew 1.5% in Q23

Salary increase4

Variables of Economic Growth4

1. Inflation5

2. Interest Rate5

3. Exchange6

4. Industrial Production and Employment Levels7

5. External Accounts7

Other variables of the Brazilian economy8

Socio Economic Variables8

Political Economic Variables9

Scenarios9

Global Economic Recovery10

Future Scenario of the Country12

Impact of the growth of China14

The Best Scenario14

Low Inertia and Dynamism Characterize the Adverse Scenario15

Factors that can Ensure Growth17

Oil, Gas and Ethanol17

World Cup17

Agro Business17

Industrial Competitiveness18

Energy18

Consumption18

Housing Market19

References20

Economic Development of Brazil

Basic Overview of Development

Despite the slower pace compared to 2012, economic activity in the country is still heated, with expansion of agriculture, trade and services. The industry, though now give signs of slowing down and is immersed in discussions on rates, also has still, good performance. Moreover, the “Greater Brazil Plan”, launched by the government in July should bring encouragement to the sector. In the general situation, there was a worsening of the international economic crisis with widespread perception that the economies of developed countries (USA, Europe and Japan) will remain stagnant or little will grow over a long period. In the scenario worst, these economies enter into recession (Zanin & Bagatini, 2012). This is the most likely scenario, partially affects the general lines of Brazil's economic policy in the short term. We expect a more rapid decline in global inflation (via price reduction of commodities) with positive effects and faster for the possible convergence of the domestic inflation target of 4.5% per year. If before the crisis was expected that the target was reached the end of 2013, it is now possible for the country to achieve the inflation target earlier.

The growth of the Brazilian economy should slow down to around 3% to 4% in 2013 and 2014. At the same time, the government should maintain strong fiscal discipline path somewhat different from that flattened in crisis 2008/2009 (Viola, 2013).

The labor market has behaved in a positive way, with rates unemployment below those observed in 2012, although the pace of growth generation of new occupations is lower. The labor income has been falling in recent seven months, but is still positive compared to the same month in 2012, according to the data from the Survey of Employment and Unemployment (PED). We notice, in recent months, slowdown in the generation of formal jobs according to the General Register of Employed and Unemployed (Caged) of the Ministry of Labor and Employment (MTE) (Stepchenkova, 2013).

The internal market, central to the current economic situation in the country, would be strongly affected if there was a fall in incomes, especially related to labor income. This is because, as the world is in crisis, reduction in the purchasing power of Brazilians would mean less consumption, which, in the limit, commits the companies themselves operating in Brazil. More than ever, it is necessary to maintain the pace of economic activity in the country and to sustain activity, growth in employment and wages is critical at this juncture (Montero, 2013).

The inflationary process already shows signs of ...