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Division
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Investment and Export
PO Box 7970
Madison, WI 53707-7970
USA
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Vol.
7 #4, March 2008
Booming Brazilian Market
 Brazil’s economy has experienced sustained growth and has
reached some important milestones. While import barriers are notoriously high in Brazil, the country has
now begun to run a trade deficit. Exports have not fallen, but
imports, especially of industrial products, are up significantly.
Businesses are willing and able to purchase imported equipment,
components, and supplies in order to enhance the quality of their own
products and their competitive advantage. The currency has
remained high enough to favor consumers and those seeking imports of
everything from commodities to machines and retail goods but at the
same time the Brazilian real has not gotten so expensive that exports
have been crippled. The 6 percent growth in Brazilian industrial
production in 2007 over the previous year was attributed to increased
domestic demand for consumer goods, especially durable ones like
vehicles and household appliances.
Long one of the world’s largest debtor nations, Brazil has now
become a foreign creditor. Brazil’s Central Bank reported
that the country’s international reserves, swollen by record
exports of agricultural commodities and oil and investment inflows,
exceeded gross foreign liabilities for the first time in January.
The strengthening of the economy has been steady. For the most
part the inflation threat has remained under control and foreign direct
investment has been on the rise.
To highlight the growing importance of the Brazilian market, the
Federation of Commerce of the State of São Paulo
(Fecomércio- SP) released a report in January showing that if
the city of São Paulo were a country, it would be among the 50
largest economies in the world; in 47th place, ahead of countries like
Egypt or Kuwait and equal to New Zealand. The GDP of the city of
São Paulo is ahead of that of 22 U.S. states. The city has
11 million inhabitants.
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