Brazil 

Brazil country policy

Policy established 28 May 2007

• No Restrictions
• The country ceiling is 2000 mln euro
• Early warning signal 1500 mln euro
• - of which was used as at 2011-08-31 108 mln euro

Country class: 3

Brazil country facts

Atradius Dutch State Business  Economic Research
Country Report last updated :  26-07-2011

Country :  BRAZIL 

Political Situation
Reasonably Stable

Head of state
President Dilma Roussef (PT).

Form of government
Broad coalition comprising the left-wing Workers’ Party (PT) and the centrist Democratic Movement Party (PMDB).

Internal Economic Situation :   Strong Economic Recovery

General situation
After a mild recession in 2009, a strong and broad-based economic upswing has emerged in 2010: GDP-growth reached 7.6% thanks to industrial output growth that even exceeded 10% thanks to a rebound of exports (Asia) and investments, and ongoing consumer demand. According to the Q1/Q2-figures (4.2%/3.1%) some slowing of GDP-growth in 2011/’12 is expected; the strong Real is increasingly hindering industrial exports. The macro-economic upswing and risen food prices have fueled inflation to 7.2% p.a. in August 2011, far above target 4.5% (+/- 2%). Moderately poor corruption index: 69th of 178. Relatively solid banking sector with strong regulation and supervision. But state-owned development bank BNDES is in a less comfortable financial position, becoming a major potential risk to the public sector accounts. The failure of Banco PanAmericano remains an isolated case.
 
External Economic Situation
Good Liquidity And Solvency

Main sources of foreign exchange
Manufactured products (53%), primary products (44%).

Main foreign markets
Latin America (25%), EU (23%), USA (19%), Asia (16%).

Main expenses of foreign exchange
Intermediate products (46%), capital goods (22%).

 
Balance of payments 
The large trade surpluses are set to decline as imports are increasing faster than exports.  However, the resulting current account deficits are easy to finance by massive capital inflows, both investment and (ST) portfolio. These capital account surpluses underpin the Real-exchange rate, significantly appreciated in 2010/’11.