Brazil and the Global Economy

Brazil has become a regional leader in Latin America and an important trade and political partner around the world. But despite its vast natural resources and large population, Brazil’s economy still has some catching up to do with the rest of the world. The second of our Globalist Factsheets looks at Brazil’s place in Latin America and the world.

Just how does Brazil size up in the global economy?

Even though Brazil — with a population of 161 million — is the world’s fifth-largest country in terms of landmass, its GDP is only as large as that of New York state. (IMF)

And how does it stack up in Latin America?

As of 1995, Brazil accounted for 40% of total Latin American GDP and has 242 companies among the top 500 in Latin America.
(Global Finance Magazine)

Brazil accounts for more than half of South America’s population — but produces only 40% of its economic output. (New York Times)

How dependent is Brazil on trade?

As of 1999, the world’s fifth largest economy, Brazil, accounts for only 0.9% of world exports. By contrast, Mexico — with an economy about half the size of Brazil’s — accounts for 2% of world exports. (New York Times)

As of 1999, exports of goods and services represent just 6% Brazil’s GDP. In nearby Chile, exports account for about 26% of GDP.
(New York Times)

What about trade with the United States?

Between the early 1990s and 1997, Brazilian exports to the United States have increased by 24%, while U.S. exports to Brazil have grown by almost 400%. (Journal Of Commerce)

As of 1998, U.S. subsidiaries operating in Brazil accounted for about one-fifth of all Brazilian exports. (Institute for International Economics)

How important a market is Brazil becoming for the world’s global corporations?

Along with the United States and Mexico, Brazil was one of Coca-Cola’s three largest markets in the world in 1999. (Economist)

In 1998, McDonald’s opened 199 new restaurants in Brazil — bringing the total number of restaurants there to 681. By comparison, McDonald’s added only 49 new restaurants in the United States during 1998.
(Financial Times)

Who should move there?

CEOs in Brazil receive compensation averaging $701,000 annually. That is 67% more than their Japanese counterparts, and 76% more than German CEOs. Only U.S. CEOs earn more, averaging almost $1.1 million a year. (Towers Perrin)