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brazil report 2007

brazil report 2007 - Brazil Area(000 sq km 8,500(US 9,600...

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Brazil Area (‘000 sq km)¹: 8,500 (US 9,600 – EU25 3,981 – World 133,700) Capital²: Brasilia (Number of inhabitants: 3.6 million) Population (million): 181.4 (US 296 – EU25 459 – World 6,000) Median age³: 28 years Nominal GDP (USD billion): 795.7 (US 12,487 – EU25 13,447 – World 44,183) Nominal GDP (USD billion at PPP): 1,557.9 (US 12,487 – EU25 12,657 – World 59,763) GDP per head (USD at PPP): 8,587.8 (US 42,129 – EU25 27,538 – World 9,962) Currency³: Real (BRL) (USD1 = BRL2.4) Languages³: Portuguese Main religions³: Roman Catholic Government type³: Federal Republic Sources: ( ) Economic Intelligence Unit 2006 data, (¹) World Bank 2005, (²) City Population, (³) CIA Fact book
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Brazil 2006/2007 FROM SÃO PAULO TO SHANGHAI New consumer dynamics: the impact on modern retailing* 2 Brazil is the 5 th largest economy in the world with a GDP of 796 billion USD in 2005 and a population of 181 million. This level of GDP was achieved despite significant parts of the population being at very low income levels and thus falling outside the consumer bracket for most of the relevant markets. Nevertheless, rather than focusing on growth, during the last few years, economic policy priorities have concentrated on adjusting the economy’s fundamentals – namely reducing inflation to reasonable levels, adjusting the fiscal and foreign exchange deficits and reducing the country’s foreign debt to make it less vulnerable to fluctuations in the world economy. There still is a lot to be done, but in general terms, these main objectives have been achieved. This however has had a cost. In contrast with the average economic growth rate of vigorous emerging markets, in recent years the Brazilian economy has been characterised by erratic growth levels. This apparent low performance resulted from a rigid monetary policy and high interest rates to reduce inflation, but also severely affected domestic consumer demand and investment. The appreciation of the Brazilian currency (Real) of around 15% in 2005 was also responsible for the decrease in competitiveness of exports, despite the 22% increase in 2005 and 100% over the last 5 years. GDP and CPI 2002 2003 2004 2005 GDP growth (%) 1.9 0.6 4.9 2.3 CPI (%) 8.5 14.7 6.6 6.9 Source: EIU, July 2006 Unemployment levels are relatively low in comparison with developed countries. Moreover, due to weak state support towards the unemployed, there is a large informal work market. Under this scenario, there has been a significant reduction in unemployment, from 12.3% in 2003 to 9.8% in 2005. A rise in formal and qualified employment reflects an upgrade in the quality of the labour force. GDP AND CPI Focus on economic policy priorities ECONOMIC OVERVIEW An emerging global player UNEMPLOYMENT Falling unemployment
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Brazil 2006/2007 FROM SÃO PAULO TO SHANGHAI New consumer dynamics: the impact on modern retailing* 3 However, despite government efforts to create new job opportunities, a further dramatic reduction of the current levels can only be expected with annual economic growth rates above 4% and after structural reforms in the labour relations and social security areas.
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