4. T
I
Early 1950
M 1957-62
E
1974-80
1968-73
L
I
N
E
1945-47
1840 -1930
1822
Late 1930
1500
1700 1807 Early
1930
5. 1500
Colonized by Portugal
Sugar first major export product.
Cattle industry developed
1700
Precious metals discovered.
1807
Napoleon occupied Portugal
6. 1822
Independence achieved.
Population – 3.9 million
Coffee accounted for 19% of total exports in 1821-30 which
increased to 63% in 1891.
Year Decadal coffee exports (1000 bags
each of 60 kg)
1821-30 3178
1831-40 10430
1841-50 18367
1851-60 27339
1861-70 29103
1871-80 32569
1881-90 51631
Source: Prada Junior, Historia, p.160
7. 1840-1930
Tariffs increased reaching an average of over 30% in 1844.
Rubber exports rose from an annual average of 6000 tons in
1870s to 21000 tons in 1890s.
Cotton exports rose by 73% in 1850-1900.
Irregular expansion of light industries.
Average yearly growth of industrial output fell from 4.6%
in 1911-20 to 3% in 1920-29.
8. Early 1930
Exports fell from US$445.9 mn in 1929 to US$180.6 mn in
1932.
Decline in coffee economy and an an excess capacity of coffee
production created in the 1920s.
Terms of trade fell by 50%.
Value of imports to decline from US$416.6mn in 1929 to
US$108.1 mn in 1932.
Change in the role of government
Late 1930
Output increased
Steel capacity grew with appearance of small firms but there
was little industrial and infrastructure investment.
9. 1945-1947
Trade liberalization was short-lived.
Industrial production grew at an annual rate of 5.4% in 1939-45.
In 1945, No quantitative restrictions on imports and forex freely
available for most capital transactions.
Early 1950
the government adopted an explicit policy of import-substitution
industrialization.
in 1953 a more flexible, multiple-exchange-rate system was
introduced.
Imports and most exports were retained in the official market and
controlled by the CEXIM (export-import dept of the Banco do Brazil)
10. 1957-1962
government enacted the Tariff Law of 1957.
Advalorem tariffs increased to 150%.
the average annual rate of growth of the GDP exceeded 7%.
the structure of the manufacturing sector experienced
considerable change.
In 1962, phase of intense import substitution, especially of
consumer goods, with basic industries growing at significant
but lower rates.
11. 1968-1973
the average annual rate of growth of GDP jumped to 11.1%, led
by industry with a 13.1% average.
personal income became more concentrated and regional
disparities became greater.
Brazil suffered drastic reductions in its terms of trade as a
result of the 1973 oil shock.
the price of petroleum quadrupled .
Country’s import bill rose and trade balance changed from a
slight surplus to a deficit. Current account deficit increased.
the rate of inflation had declined steadily
Government expenditure as a proportion of GDP increased
from 17.1% in 1947 to 22.5% in 1973.
12. 1974-1980
In 1979, a economic package was introduced which included
maxi-devaluation of the currency by 30%, elimination of tax
incentives and export subsidies among others.
Between 1974 and 1980, the average annual rate of growth of real
GDP reached 6.9 percent and that of industry, 7.2 percent.
The foreign debt rose from US$6.4 billion in 1963 to nearly
US$54 billion in 1980.
Since 1973, a upward trend of inflation began. The rate more than
doubled from 1973 to 1974, and was in the 30-48% range in the
next 4 years. It doubled again in 1978-79 and crossed the 100%
mark in 1980.
23. Socio economic policies
six key policy goals
price stability
efficiency of the taxation System
provision of long-term finance
investment in research and development
education of the workforce
selective investments in infrastructure
24. enacted a series of contractionary fiscal and monetary
policies
restricting its expenses
raising interest rates
25. Govt’s macroeconomic policies
achieved through tight controls of growth in
expenditures
Vigor in generating revenues
Throughout the first half of 2003 interest rates were
kept at very high levels as the Lula government
continued its policy of reassuring the international
community.
26. Discovery of Tupi oilfields.
The discoveries have made Brazil one of the world's
top 10 oil producers.
28. Brazil has become the sixth-largest economy in the
world.
The economy grew at 2.7% last year.
The Brazilian economy is now worth 2.5 trillion
dollars (£1.6 tn).
29. In 2010 the Brazilian economy expanded by
7.5%.While it slowed to expected growth of 3.5% in
2011, this was caused by external factors, primarily the
financial crisis in the Eurozone hitting the wider
economy.
The currency, Brazilian real, fell 11% against the US
dollar last year. That is after two years of huge gains -
up 5% in 2010 and 34% in 2009.
33. However, the country still struggles with inequality.
The country's Gini coefficient, a measure of income
inequality, peaked at 0.61 in 1990 - but 2010's figure
was a historic low of 0.53.
There has been a rise of a new middle class, whose
purchasing power has been fuelling Brazil's continuous
economic growth amid declining industrial output and
weak global economic activity
34. The country’s interest rates are among the world’s
highest for a large economy. Currently Brazil is
changing this policy and has cut its interest rates seven
times in the past year to a record low of 9%.
With substantial oil and gas reserves continuing to be
discovered off Brazil's coast in recent years, the
country is now the world's ninth largest oil
producer, and the government wishes to ultimately
enter the top 5.
Brazil is today the world’s third-largest exporter of
agricultural goods.
35. MACROECONOMIC INDICATORS
GDP (current US$) - 2.4 trillion dollars
Income level - Upper middle income
Per Capita Income – US$ 11,500
Exchange rate - 1 Brazil real (BRL) = 0.492053 U.S.
dollars or 1 USD = 2.032 BRL
Current interest rates – 8.5%
Inflation rate – 4.92%
Population – 195 million
36. References
http://www.mapsofworld.com/brazil/economy/history.
html
http://www.bbportuguese.com/economic-history-of-
brazil.html
The Brazilian Economy by Werner Baer
http://data.worldbank.orgWorld Bank data 2012
http://www.oecdobserver.org/news/archivestory.php/ai
d/1582/Brazil_92s_Economy.html
http://www.bbc.co.uk/news/business
http://www.business.illinois.edu/Working_Papers/pape
rs/05-0108.pdf
The Plano Real or Real Plan intended to stabilize the domestic currency in nominal terms after a string of failed plans to control inflation. It created the (Unit of Real Value), which served as a key step to the implementation of the current currency, the real. At first, most academics tended not to believe that the Plan could succeed. Stephen Kanitz was the first public intellectual to predict the future success of the Real Plan.
to promote rapid economic growth and international competitiveness as a backdrop to achieve social development
By doing so, the country was able to keep inflation under control for several years. In addition, the high interest rates attracted enough foreign capital to finance the current account deficit and increased the country’s international reserves.
the government’s determination to pursue tight fiscal policy that it actually succeeded in surpassing the primary fiscal surplus it had pledged to the IMF
