Analysis of BRIC countries Essay Example | Topics and Well Written Essays - 2500 words

Analysis of BRIC countries - Essay Example The availability of abundant natural resources and growing mining, agriculture, manufacturing and service industries has taken the economy of Brazil to highest ranks among South American nations and has gained a commendable position in world economy. The fall in real wages during the period 2001 to 2003 slowed the economic growth of Brazil to 2.2 percent per year. Subsequently, it was affected by several internal and global economic crises. But the economy did not collapse because Brazilian economy has a strong foundation built by the economic programs and policies instituted by President Cardosa and taken forward by President Lula Da Silva. The Brazilian economy is undergoing a steady growth and development since 2004 that has given rise to the rate of employment and real wages. The economic system operates using floating exchange rate, adopts compressed fiscal policy and keeps the inflation rate on check. The Brazilian currency underwent a sharp depreciation which in turn resulted in extreme adjustment in current account during the period 2003 to 2006. Following this situation there was trade surpluses and the surplus agricultural production lead to increase in the rate of exports. However, Brazilian economy has certain weaknesses. The economy is mostly associated to debts. The rate of debts has increased during the period 1994 to 2003. The rise in debt was controlled in 2006 with the introduction of economic programs to increase public investment and control taxes. The current GDP of Brazil is 1.6 trillion with a real growth rate of GDP at 3.7 percent. The inflation is 3 percent and the rate of unemployment is 9.6 percent. Agricultural products that contribute to the economy are wheat, coffee, rice and sugarcane. Major industries include aircraft, textiles, chemicals, steel, shoes, motor vehicles, etc. (Brazil Economy) Official figures indicate that the GDP of Brazil has