Economic growth in Brazil

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Economic growth in Brazil by Mind Map: Economic growth in Brazil

1. cost of economic growth

1.1. Environmental destruction.

1.1.1. deforestation rate in the amazon increased from 1993 to 1998, the same period in which brazil experienced rapid economic growth

1.2. increased inflation

1.2.1. inflation is threatening the official target of 4.5%. The result is that the Central Bank is likely to hike interest rates to cool things down

1.3. income inequality

1.3.1. those working in these industries had an increase in wage compared to those not working in these industries-textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other machinery and equipment

1.4. reducing brazils trade balance

1.4.1. Brazil's trade balance which has fallen sharply in this first quarter and is expected to show a deficit for the first time since 2003 - of around US$ 14.5 billion compared with surplus of US$ 27 billion in 2007

2. reasons for the success of economic growth in Brazil

2.1. booming property market

2.1.1. Brazil’s tourism success is creating a huge demand for accommodation and shrewd property investors are acting early, purchasing bargain properties with a view to generating good rental yields. Meanwhile the market is gaining momentum and property prices are steadily pushing upwards.

2.2. Currency exchange

2.2.1. Brazilian currency has recently stabilised and become far more competitive with other international currencies, such as the US dollar. This has of course increased purchasing power for overseas investors in Brazil. The competitiveness of currency exchange also means that international businesses from the US and UK are establishing themselves in Brazil and are able to operate with far lower overheads, therefore creating increased productivity and profits.

3. Factors that hinder Economic growth

3.1. overheating economy

3.1.1. rising demand outpaces supply. Factories are working flat out at record levels of use of installed capacity and the shortfall is being met by imports

4. Benefits of economic growth

4.1. low unemployment, jobs are plentiful.

4.1.1. This massive demand for Brazilian products has spurred companies to invest in new machinery and equipment and hire new workers eg. Increased demand for Brazilian iron ore and steel, fertilizers, pork, beef and chicken by the chinese lead to job creation

4.2. increased consumer spending

4.2.1. due to increased wages those having a monthly income of more than 1,062 Brazilian reais ( or around US$ 800) rose from 34% of the population in 2005 to 46% in 2007

4.3. expansion of industries

4.3.1. eg productive capacity of the automobile industry will be increased from 3.5 million a year to 3.85 million in the second semester of 2008 and raised even further in 2009 to 4 million.