Brazilian Economy Essay Example | Topics and Well Written Essays - 1000 words

brazilian Economy - Essay ExampleThese factors combine to show that Brazil is on its way up. Those who maintain that Brazil is performing the just ab out(a) of the BRIC group similarly argue that despite long withdrawals by foreign investors, Brazil has suffered less than the separate BRIC members and this is a good sign of a firm economy.Delfeld (2008) says, BRIC begins with Brazil. Political stability (Mr. Lula is up there in the stratosphere at a 78% approval rating), unattackable consumer spending, more flexible exchange rates, a more effective central bank and higher militia may help Brazil weather the global financial storm much better than most expect. Brazil has been able to maintain foreign reserves in excess of $200bn. More than that, the credit crisis may have come at a good time, potentially helping the economy to cool without damping step-up too far below the countrys potential. Inflation has risen recently to about 6% due to substantive consumer spending. A s lowing of global growth could be helpful in moderating this and also allow in the central bank to suspend its tightening policy sometime later this year.Brazil has been doing exceptionally fountainhead since the election of President Luiz Lula in 2006. With exports booming, the country has witnessed considerable growth in the size of its middle class. not only that, Brazil has its millionaires club expanding too with 130,000 members in 2006 to 190,000 in 2007. That is extraordinary economic growth and it is because of this that Brazil was awarded investment grade status by Standard and Poors which also attracted considerable investor energy and helped boost their confidence.1A country that now poses a threat to the US economy has seen all this exceptional growth in only the last two years. Before this period, the company was far behind the US and even other strong economies like Japan. The GDP comparison in 2005 is shown belowGross Domestic Product in 2005 (Trillions USD, Current P rices)US 12.46, Japan 4.56, Germany 2.79, UK 2.20France 2.13, China 1.98, India 0.80, Brazil 0.80 2 At that time United States was clearly the attraction still a lot changed this year when worlds biggest economy was dealt some serious blows. Brazil however go along to show growth signs till as late as October 2008 but beginning November, Brazil has also faced some growth problems. The recession that has hit the world has also arrived in Brazil. According to the really recent survey by Morgan Stanley, Brazilian economy is expected to grow by 2 share in 2009 this is clear down from the earlier prediction of 3 percent. Apart from this, Morgan Stanley also doesnt rule out the possibility of zero growth. Brazilian currency is also consistently falling against US dollar.The only reasons wherefore we must not rule out possible economic problems in the future is Brazils continued skin against drug lords and its unequal income distribution. Brazils poor continue to suffer as its rich section is consistently getting higher share of economic growth. Lula has certainly been successful in creating a robust economy but what he is overlooking is the fact that there is vast disparity between the rich and the poor which not only translates into fewer opportunities for the poor but also leads to higher drug-related activities. The Gini co-efficient is a useful tool for measuring income distributio