Political & Economic Environment

Political & Economic Environment
A FAVORABLE ECONOMIC, POLITICAL AND LEGAL ENVIRONMENT
Covering 8.5 million square kilometers, almost double the size of the European Union, Brazil has
the fifth-largest population in the world and massive reserves of natural resources (such as iron
ore and oil). With over 300 million hectares of agricultural land in privileged geographical
conditions, its territory is also safe from natural disasters. Factors such as these put the country in
a relevant position on the global market.
Recent economic growth confirms this positive outlook. From 2002 to 2009, real GDP in US
dollars almost doubled, going from US$ 724 billion to US$ 1.5 trillion, with constant growth from
2004 onwards. Brazil is today the tenth-largest economy in the world, ahead of Russia and India,
and the largest in Latin America. The country was classified by the United Nations Development
Program (UNDP) as having a high Human Development Index (HDI), ahead of the other BRIC
countries (Russia, India and China).
Brazil is an important player in global markets such as mining, aerospace, energy, agriculture and
cattle farming.
DOMESTIC MARKET SHOWS CONSISTENT GROWTH
With a population of 192 million people, Brazil`s domestic market is expanding as a result of
economic growth and income distribution policies. Household consumption has grown vigorously
over the last few years, reaching US$ 236 billion in 2009.
This expansion has been influenced by gains in the lowest income bracket. Between 2004 and
2009, according to a survey carried out by Fundação Getúlio Vargas (FGV), the Brazilian middle
class grew from 42.99% to 53.58% of the population, while the low income segment fell from
46.39% to 30.79%. Already the upper class has increased by 10.66% to 15.63% during this
period.
This positive scenario was recognized by credit rating agencies Standard & Poor´s and
Fitch, which in the first half of 2008 classified Brazil as "investment grade". According... [continues]

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