Business profile of brazil Essay Example | Topics and Well Written Essays - 2000 words

Business profile of brazil - Essay Example Along with this there are recommendations for investment in certain sectors and the government focuses upon these sectors with FDI policy. This report details out factors that are analysed for investment criteria in Brazil economy that will benefit investors and traders. Table of Contents Executive Summary 2 Introduction 4 Brazil Economy 4 GDP (Gross Domestic Product) Growth 6 Inflation Rate 7 Inflation and Interest Rates 9 Interest Rates 11 FDI Policy by Brazil Government and Investment in Automobile Sector 12 International Trade Theory & Investment Opportunity 13 Balance of Trade 14 Exchange Rate 15 Exchange Rate and Current Account 16 Economic Indicators 16 Better Investment Opportunity in Energy Sector in Brazil 17 Conclusion 21 References 22 Introduction The report illustrates the investment opportunity for a company that wants to invest in Brazilian economy. The potential of the Brazil’s economy will be provided in detail along with the sector that will benefit from the investment opportunity of the company. The report will be published in The Economist magazine so that the investment opportunity in Brazil can be highlighted to the general public for investment purpose. For the analysis of the investment opportunity, the economic aspects of the international economy along with Brazil’s economic conditions will be discussed. ... Brazil Economy In South America, Brazil is the biggest country and it is the fifth largest country in the world in terms of area. Brazil is well known for its raw materials production and has been able to contribute more to the world’s GDP. The economy of Brazil is largest in South America and it has been able to boost the development of mining, agriculture, manufacturing and service sectors (Economy Watch, 2011). The economy of Brazil outweighs other nations of South America and its economy is expanding and its presence can be felt in the international arena as well. Since 2003, the economy of Brazil has improved steadily with the macroeconomic stability, reduction in its debts and building up foreign reserves. According to CIA, it was in the year 2008 when Brazil became ‘net external creditor’ and was awarded in the investment category status related to its debt by two rating agencies. Even after the financial recession in 2008, the economy of Brazil was the fir st to recover quickly. In 2010, the ‘consumer and investor confidence index’ revived and grew. The high interest rate and the growth of the Brazil’s economy make it attractive for the purpose of investment. There was large inflow of foreign capital in the economy that raised the value of the currency and government has also increased the tax upon certain foreign investments (CIA, 2011). There has been a significant increase of 7.5% in the economy of Brazil. This was due to the stronger currency value during the year 2010 and is expected to grow. ‘A GDP of 3.675 trillion Reais was converted at the year’s average exchange rate into US $2.089 trillion’. This is the reason that Brazil economy overtook Italy’s economy and the per-capital income of Brazil exceeded than