s fell and Brazil's economy
grew, on average, only 2.2% per year, as the country absorbed a
series of domestic and international economic shocks. That Brazil
absorbed these shocks without financial collapse is a tribute to the
resiliency of the Brazilian economy and the economic program put in
place by former President CARDOSO and strengthened by President LULA
DA SILVA. In 2004, Brazil enjoyed more robust growth that yielded
increases in employment and real wages. The three pillars of the
economic program are a floating exchange rate, an
inflation-targeting regime, and tight fiscal policy, all reinforced
by a series of IMF programs. The currency depreciated sharply in
2001 and 2002, which contributed to a dramatic current account
adjustment: in 2003 and 2004, Brazil ran record trade surpluses and
recorded its first current account surpluses since 1992.
Productivity gains - particularly in agriculture - also contributed
to the surge in exports, and Brazil in 2004 surpassed the previous
year's record export level and again posted a current account
surplus. While economic management has been good, there remain
important economic vulnerabilities. The most significant are
debt-related: the government's largely domestic debt increased
steadily from 1994 to 2003 - straining government finances - before
falling as a percentage of GDP in 2004, while Brazil's foreign debt
(a mix of private and public debt) is large in relation to Brazil's
small (but growing) export base. Another challenge is maintaining
economic growth over a period of time to generate employment and
make the government debt burden more manageable.

GDP (purchasing power parity):
$1.492 trillion (2004 est.)

GDP - real growth rate:
5.1% (2004 est.)

GDP - per capita:
purchasing power parity - $8,100 (2004 est.)

GDP - composition by sector:
agriculture: 10.1%
industry: 38.6%
services: 51.3% (2004 est.)

Labor force:
89 million (2004 est.)

Labor force - by occupation:
agriculture 20%, industry 14%, services 66% (2003 est.)

Unemployment rate:
11.5% (2004 est.)

Population below poverty line:
22% (1998 est.)

Household income or consumption by percentage share:
lowest 10%: 0.7%
highest 10%: 48% (1998)

Distribution of family income - Gini index:
60.7 (1998)

Inflation rate (consumer prices):
7.6% (2004 est.)

Investment (gross fixed):
19.8% of GDP (2004 est.