In recent years Brazil has emerged as a major player on the global stage. The country boasts the world’s fifth largest landmass and eighth largest economy, and has enjoyed rapid development, stable policies, and massive foreign direct investment. As part of the “BRIC” markets (Brazil, Russia, India and China), Brazil is one of four emerging markets that combined are expected to make up almost half of the world’s GDP by 2030. The drivers of Brazil’s extraordinary growth are diverse, including mineral resources, agricultural products, energy, and high-value manufacturing.
Brazil has, in recent years, adhered to generally effective macro-economic policies and is focused on targeting inflation, maintaining a floating currency, carefully managing debt, and protecting its large foreign currency reserves. The Brazilian Central Bank has kept interest rates low during the in recent years to encourage growth during this time of global economic uncertainty. Brazil also boats a first-rate banking and finance sector, including the world’s third largest stock exchange.
Brazil is a major producer of key agricultural products and the world’s fourth largest food exporter. Agricultural production has plenty of room for continued growth, with 150 million acres of arable land yet to be cultivated. Pastureland covers a quarter of the country, supporting Brazil’s status as the largest producer of beef in the world.
In addition to strong agricultural assets, Brazil is rich with mineral resources. Brazil produces large volumes of precious metals, iron ore, and many other natural resources. In addition, major oil and gas reserves have been proven and are progressively coming online. Brazil has made significant investments in its renewable energy sector and achieved energy independence in 2006.
Schulze Global views Brazil’s regional integration with neighboring economies as an important step towards sustainable growth. Brazilian trade with the Southern Common Market countries (Argentina, Paraguay, Uruguay), the Andean Community (Bolivia, Colombia, Ecuador and Peru), and Mexico increased by triple digits over the last ten years. Often with preferential financing from the Brazilian Development Bank, Brazil’s global companies have become major actors in infrastructure projects throughout the South America region.
Looking beyond the region, China is Brazil’s largest export market for a number of products—and also serves as Brazil’s largest source of foreign direct investment. The relationship between the two countries continues to deepen, driven by China’s demand for natural resources and agricultural products.