Laboratory Work. Macroeconomic Planning and Forecasting in Brazil

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Federal State-Funded Educational Institution of Higher Professional Education “Financial University under the government of the Russian Federation”

International Finance Faculty

Department: Macroeconomics planning and forecasting

LABORATORY WORK
On a theme:
“Macroeconomic planning and forecasting in
BRAZIL”

Done by: Markov Yaroslav
Group IFF 4-2
Scientific tutor: Professor Matrizaev B.

Moscow 2012
Content

I. Real Sector and Balance of Payment3
II. Innovation policy12
III. Fiscal policy17
IV. Monetary policy24
V. Conclusion29
VI. Appendix31
VII. Information sources37

Real Sector of Brazil
What is Real sector?
Real sector refers to the sector in which there are productions of goods and services through combined utilization of raw materials and other production factors such as labour force, land and capital or by means of production process. Market is the determiner of what society should produce and through what combination of production factor. There are two major markets in this sector:

1. production faction market, which includes raw material market, labour market, land and capital market. 2. Output market, with the business operators managing the utilization of production factors, andraw materials in order to produce goods and services as exemplified in agricultural and manufacturing productions.

The economy of Brazil is the world's sixth largest by nominal GDP and is expected to become fifth by the end of 2012, even if it risks losing a position in the ranking because of its weak currency, the Brazilian real. Brazil has moderately free markets and an inward-oriented economy. Its economy is the largest in Latin American nations and the second largest in the western hemisphere. Brazil is one of the fastest-growing major economies in the world with an average annual GDP growth rate of over 5 percent. In Brazilian reals, its GDP was estimated at R$ 3.143 trillion in 2009. The Brazilian economy has been predicted to become one of the five largest economies in the world in the decades to come. Brazil is a member of diverse economic organization, such as Mercosur, Unasul, G8+5, G20, WTO, and the Cairns Group. Its trade partners number in the hundreds, with 60 percent of exports mostly of manufactured or semimanufactured goods. Brazil's main trade partners in 2008 were: Mercosul and Latin America (25.9 percent of trade), EU (23.4 percent), Asia (18.9 percent), the United States (14.0 percent), and others (17.8 percent). According to the World Economic Forum, Brazil was the top country in upward evolution of competitiveness in 2009, gaining eight positions among other countries, overcoming Russia for the first time, and partially closing the competitiveness gap with India and China among the BRIC economies. Important steps taken since the 1990s toward fiscal sustainability, as well as measures taken to liberalize and open the economy, have significantly boosted the country’s competitiveness fundamentals, providing a better environment for private-sector development. The owner of a sophisticated technological sector, Brazil develops projects that range from submarines to aircraft and is involved in space research: the country possesses a satellite launching center and was the only country in the Southern Hemisphere to integrate the team responsible for the construction of the International Space Station (ISS). It is also a pioneer in many fields, including ethanol production. Brazil, together with Mexico, has been at the forefront of the Latin American multinationals phenomenon by which, thanks to superior technology and organization, local companies have successfully turned global. These multinationals have made this transition notably by investing massively abroad, in the region and beyond, and thus realizing an increasing portion of their revenues internationally. Brazil is also a pioneer in the fields of...
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