uraged foreign investment. Since
then, tight monetary policy has apparently brought inflation under
control - consumer prices increased by 23% in 1995 compared to more
than 1,000% in 1994. At the same time, GDP growth slowed from 5.7%
to 4.2% as credit was tightened and the steadily appreciating real
encouraged imports while depressing export growth. The increased
stability of the Brazilian economy allowed it to weather the fallout
from the Mexican peso crisis relatively well, with foreign funds
flowing in during the second half of 1995 to swell official foreign
exchange reserves past the $50 billion mark. Stock market indices in
Sao Paulo and Rio de Janeiro, however, ended 26% lower in 1995.
President CARDOSO remains committed to further reducing inflation in
1996 while boosting growth, but he faces key challenges. Servicing
domestic debt has become dramatically more burdensome for both
public and private sector entities because of very high real
interest rates which are contributing to growing budget deficits and
a surge in bankruptcies. Fiscal reforms, many of which require
constitutional amendments, are proceeding at a slow pace through the
Brazilian legislature; in their absence, the government is
maintaining its strict monetary policy. Brazil's natural resources
remain a major, long-run economic strength.

GDP: purchasing power parity - $976.8 billion (1995 est.)

GDP real growth rate: 4.2% (1995)

GDP per capita: $6,100 (1995 est.)

GDP composition by sector:
agriculture: 16%
industry: 25%
services: 59% (1994)

Inflation rate (consumer prices): 23% (1995)

Labor force: 57 million (1989 est.)
by occupation: services 42%, agriculture 31%, industry 27%

Unemployment rate: 5% (1995 est.)

Budget:
revenues: $58.7 billion
expenditures: $54.9 billion, including capital expenditures of $NA
(1994)

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

Industrial production growth rate: 3.5% (1995 est.)

Electricity:
capacity: 55,130,000 kW
production: 241.4 billion kWh
consumption per capita: 1,589 kWh (1993)

Agriculture: coffee, soybeans, wheat, rice, corn, sugarcane,
cocoa, citrus; beef

Illicit drugs: illicit producer of cannabis, coca cultivation in
the Amazon region has diminished in recent years because of its low
alkaloid content, m