Brazil’s Economic Power

Abstract

What defines a world economic power among nations? And is Brazil ready to take its place as one of these world powers? Until 2011, the answer appeared to be “yes”, on the heels of a decade of robust GDP growth, which reached an average of 4.2% per year between 2003 and 2012, and peaked at 7.5% in 2010 (see Figure 3.1), and a historically low unemployment rate at around 5.4% — combined with a bright future in oil and natural resources, a growing manufacturing base, and the rating of Brazil’s debt as “investment grade” since 2008 by rating agencies Standard & Poor’s and Moody’s the following year.1 Since then the economy has cooled, with GDP growth slowing down to 2.7% in 2011, 0.9% in 2012 and pushing back to 2.3% in 2013, while social and infrastructure issues continue to loom. However, there is still a consensus among numerous stakeholders that Brazil’s time has come as a respected world economic power. Brazil is the fifth biggest country in the world by landmass and population, the second biggest emerging market after China and the seventh largest economy in the world (OECD, 2013, IMF, 2013).2 Its sheer size makes Brazil a key country in the world.