Brazil

Following three centuries under the rule of Portugal, Brazil became an independent nation in 1822 and a republic in 1889. By far the largest and most populous country in South America, Brazil overcame more than half a century of military intervention in the governance of the country when in 1985 the military regime peacefully ceded power to civilian rulers. Brazil continues to pursue industrial and agricultural growth and development of its interior. Exploiting vast natural resources and a large labor pool, it is today South America's leading economic power and a regional leader. Highly unequal income distribution remains a pressing problem.

Main Airports

Brasilia International (BSB), Rio de Janeiro (GIG) (Galeão), São Paulo (GRU) (Guarulhos)

U.S. Embassy

SES Avenida das Nacoes, quadra 801, lote 3, Brasilia, DF, CEP: 70.403-900
tel. 55-61-3312-7000

Statistics

GDP: purchasing power parity:

$1.556 trillion (2005 est.)

GDP - real growth rate:

2.4% (2005 est.)

GDP - per capita: purchasing power parity:

8,400 (2005 est.)

Inflation rate (consumer prices):

6.9% (2005 est.)

Labor force:

90.41 million (2005 est.)

Exports:

$115.1 billion f.o.b. (2005 est.)

Exports - partners:

US 19.8%, China 7.5%, Argentina 7%, Germany 5.4% (2005)

Imports:

$78.02 billion f.o.b. (2005 est.)

Imports - partners:

US 19.7%, Germany 8.7%, Argentina 8.2%, China 6.2%, Nigeria 6.1% (2005)

Population:

188,078,227

Population growth rate:

1.04% (2006 est.)

Population Below Poverty Line:

22% (1998 est.)

Major Industries:

textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other machinery and equipment

Employing Workers: 99*

Registering Property: 124*

Enforcing Contracts: 120*

Closing a Business: 135*

*2006 World Bank rank out of 175 countries

Starting a Business

The table below shows the number of steps and the amount of time needed to start a business, on average

Indicator	Brazil	Region
Procedures (number)	17	10.2
Time (days)	152	73.3

Brazil Risk Assessment

Country Rating

Rating: A4

A somewhat shaky political and economic outlook and a relatively volatile business environment can affect corporate payment behaviour. Corporate default probability is still acceptable on average.

Risk Assessment

With domestic demand remaining the economic engine, growth should remain strong in 2008 and almost reach the five per cent target set out in the government's January 2007 growth acceleration programme. Although Brazil has demonstrated notable capacity to withstand international financial market volatility, the emergence of inflationary pressures has prompted the Central Bank to put further reductions of still-high interest rates on hold.

Export performance, the appreciation of the real notwithstanding, should allow the country to maintain trade and current account surpluses and cause a sharp reduction in external financing needs, entirely covered by foreign direct investment. Moreover, Brazil's external vulnerability should continue to decline sharply in conjunction with a marked improvement in external debt ratios, with the country's record level of foreign exchange reserves constituting a very solid safety net.

Although the structure of public domestic debt has continued to improve, total public debt is still too high at 64% of GDP in gross terms and 45% in net in 2007. That has notably tended to delay infrastructure modernisation. Progress on the structural reforms needed meanwhile to foster more sustainable growth is likely to remain slow due to the parliamentary coalition's lack of homogeneity and to a lack of political commitment. The reforms will nonetheless be a major challenge during President Lula da Silva's second term.

In that relatively favourable context corporate solvency has been generally improving, particularly in buoyant sectors like oleaginous production, the sugar industry, mineral extraction, construction, steel, aeronautics, and, to a lesser degree, the car industry. The Coface payment experience has been satisfactory. Certain sectors, however, like pharmaceutical product and fertilizer distribution, may have to contend with particular difficulties while others, like clothing and shoes, have been facing foreign competition heightened by the real's strength with their payment behaviour suffering in consequence.

STRENGTHS

• Brazil boasts abundant and varied natural resources and a relatively diversified economy.
• Manufactured products constitute a growing proportion of production and exports.
• The country has increased its economic and financial stability and its capacity to withstand international financial market volatility.
• The policy of preserving fundamental macroeconomic equilibrium should stay on track.
• Brazil's domestic market potential and favourable labour costs have tended to enhance its attractiveness to foreign investors.

• Public debt has remained high and exposed to domestic interest rate trends, with its maturity being still too short.
• The structural reforms needed in education, social security, job market, and tax and regulatory systems have come against substantial political roadblocks and lack of official commitment.
• A lack of investment has resulted in deficiencies in energy, rail, road and port infrastructure, with public/private partnerships not yet really effective.
• Brazil is still relatively vulnerable to a downturn in raw material prices.

• Agriculture
• Apparel
• Arts & Crafts
• Automobile
• Bags, Cases & Boxes
• Chemicals
• Computer Hardware & Software
• Construction & Real Estate
• Consumer Electronics
• Electrical & Electronics
• Energy & Environment
• Food & Beverage
• Furniture & Furnishing
• Health & Medicine
• Home Supplies
• Industrial Supplies
• Lights & Lighting
• Machinery
• Mineral & Materials
• Office Supplies
• Security & Protection
• Service
• Sports & Entertainment
• Telecommunications
• Textile
• Toys
• Transportation