The economy in Brazil

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The economy in Brazil

02/07/2014 | Adrián Corona Cuesta

Brazil is the largest country of Latin America and is the fifth biggest country in terms of land mass in the world.

Brazil is the sixth world economy in terms of the Gross Domestic Product; it is ahead of countries such as United Kingdom, Canada, Italy or Spain. Brazil has a moderate monetary policy and the rate of unemployment is at a historical minimum. These factors, together with other microeconomic reforms, have contributed to Brazil being able to endure the crisis.

In 2010, Brazil´s Gross Domestic Product grew by 7.5%, but now the Brazilian economy seems to be showing signs of weakness because of the indebtedness of the consumers and the decrease in the investments by institutional investors and foreign governments.

In spite of the government´s efforts to stimulate the economy, recently growth has been very moderate. There are a lot of disadvantages that reduce its growth potential such as the deterioration of the infrastructure or social and economic inequalities.

Despite of the good economic results, the social inequalities play an important role in shaping the economy. The country has some of the highest inequality rates in the world and there have been increases in delinquency and violence.

The newspaper Caracol said that “Economists in Brazil predict failure in the future” because the situation in Argentina is uncontrollable and this country could influence the failure of Brazil. And Brazil has said they are always going to have relationship with Argentina and Venezuela.

From my point of view Brazil is a big country but there are a lot of problems such as the violence, the “favelas” or the poverty. For this reason a lot of people don´t visit Brazil. If they fix these problems in the future, I think that they can continue to grow.

That being said, a lot of companies see this country as an opportunity to set up their new headquarters because the workforce is cheaper than European countries, a fact that can stimulate to these companies to move there.

Finally, with the 2014 World Cup, and the Olympic Games that are going to be celebrated in Brazil in 2016, they will create a lot of jobs in construction and the hospitality industry. The mega sporting events will increase inter-country travel and domestic purchases however, in my opinion, the most important part of these games is the publicity for the country because it can be beneficial for Brazil in the long run.

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