-
8/8/2019 1.the Economy of Brazil
1/10
The Economy Of Brazil
Presented By:Ashish Jain A1802009024
Dharna Chawla A1802009084
Neha Arora A1802009395
Prepared By:Group-1
Section - E
-
8/8/2019 1.the Economy of Brazil
2/10
Overview Of Brazil
Population : 179 million (2004) 26 states and 1 federal
district
GDP in 2004 estimated at US$600 billion
Language: Portuguese The largest economy in South America and
the 12th in the
world
Primary economic sectors are: agriculture, automobile,
utilities, transport, industry, mining and energy.
Main economic regions are: So Paulo, Rio de Janeiro,
Minas Gerais and Paran.
-
8/8/2019 1.the Economy of Brazil
3/10
Abstract
This Case is an overview of the state of
Economy of Brazil between 1985-1994 and
how the Asian currency crisis in 19971998
hampered the economy, with an emphasis on
the role of the International Monetary Fund
(IMF).
-
8/8/2019 1.the Economy of Brazil
4/10
1980s : The Economy had stagnated with no real growth in
realgrowth till 1990s.
1985-1994 : -0.4% growth in the real per capita income
It suffered runaway inflation was over 2700 % in 1993.
1994 It introduced a new currency (the real pegged to the
dollar), defended it with high interest rates, and
decreasedinflation under 10%.
High income disparity between the rich and the poor.
Due to lack of employment, informal sector activities was
high(jobs: street vending, drugs paddling and prostitution).
State owned companies accounted for 8% of the GNP, major partin
the Budget deficit
Stringent Import barriers: no product could be imported if it
wasproduced in Brazil( irrespective of the domestic prices)
Rapid growth at any cost- in 1995 over 11000 sq miles of
AMAZON has been cleared over
Pre-Asian Financial Crisis
-
8/8/2019 1.the Economy of Brazil
5/10
Contt
1991: New government formed- major policychanges
state sold 73 companies to private investors between
1990-1996
Lowered tariffs on imports
-
8/8/2019 1.the Economy of Brazil
6/10
The Asian Financial Crisis: It stared on July 2,1997 with the
devaluation of the Thai baht.
Brazil
It had a public debt problem. November 1998: IMF put together
$41.5 billion rescue
package for Brazil
It devalued the real by 8% in January 1999 and then
allowed it to float.
The real lost 30% of its value against the dollar.
During-AsianFinancialCrisis
-
8/8/2019 1.the Economy of Brazil
7/10
Post Crisis
Capital Flight leading to nosedive in the stock
market
It struggled to prevent the real from going into a
free fall and as a result it entered into a recession.
The recession was short lived, inflation did not take off,
and financial-sector collapse was avoided.
-
8/8/2019 1.the Economy of Brazil
8/10
Political
- With formation of newgovt. in 1991, institutedmany changes
for
development of the economy
Economic
- No growth till 1990s
-High Unemployment
-Income Inequality
Social
-Favelas
-43% informal sector
-MST movement
Technological
-Sugarcane is used to makeethyl alcohol fuel.
-One of the Worlds largestHydroelectric powerproducers.
Legal
-Reduction of import tariffson similar items and tariff
duties.- Disinvestment in stateowned companies.
Environmental
-Well endowed with mineralresources like iron ore,
bauxite,gold,etc.-Largest rainforest of theworld i.e. Amazon
-
8/8/2019 1.the Economy of Brazil
9/10
Current Scenario
Brazil is rapidly emerging from the global crisis a solid
macro-policy framework and a well capitalised
banking sector have allowed the economy to absorb the
external shock with relative ease.
Economic and Political importance will continue toincrease over
the next decade
Hosting both the Football World Cup in 2014 and the
Olympic Games in 2016
The financial sector is set to thrive in the comingyears
Increasing investment
-
8/8/2019 1.the Economy of Brazil
10/10
Thank You
