Economy Overview:

    The economy, with large agrarian, mining, and manufacturing sectors, entered
    the 1990s with declining real growth, runaway inflation, an unserviceable
    foreign debt of $122 billion, and a lack of policy direction. In addition,
    the economy remained highly regulated, inward-looking, and protected by
    substantial trade and investment barriers. Ownership of major industrial and
    mining facilities is divided among private interests - including several
    multinationals - and the government. Most large agricultural holdings are
    private, with the government channeling financing to this sector. Conflicts
    between large landholders and landless peasants have produced intermittent
    violence. The COLLOR government, which assumed office in March 1990,
    launched an ambitious reform program that sought to modernize and
    reinvigorate the economy by stabilizing prices, deregulating the economy,
    and opening it to increased foreign competition. Itamar FRANCO, who assumed
    the presidency following President COLLOR's resignation in December 1992,
    was out of step with COLLOR's reform agenda; initiatives to redress fiscal
    problems, privatize state enterprises, and liberalize trade and investment
    policies lost momentum. Galloping inflation - by June 1994 the monthly rate
    had risen to nearly 50% - had undermined economic stability. In response,
    the then finance minister, Fernando Henrique CARDOSO, launched the third
    phase of his stabilization plan, known as Plano Real, that called for a new
    currency, the real, which was introduced on 1 July 1994. Inflation
    subsequently dropped to under 3% per month through the end of 1994. The
    newly elected President CARDOSO has called for the implementation of
    sweeping market-oriented reform, including public sector and fiscal reform,
    privatization, deregulation, and elimination of barriers to increased
    foreign investment. Brazil's natural resources remain a major, long-term
    economic strength.


National product:
    GDP - purchasing power parity - $886.3 billion (1994 est.)
National product real growth rate:
    5.3% (1994 est.)
National product per capita:
    $5,580 (1994 est.)
Inflation rate (consumer prices):
    1,094% (1994 est.)
Unemployment rate:
    4.9% (1993)
Budget:
  revenues:
    $113 billion
  expenditures:
    $109 billion, including capital expenditures of $23 billion (1992)


Industrial production:

    growth rate 9.5% (1993); accounts for 39% of GDP
Electricity:
  capacity:
    55,130,000 kW
  production:
    241.4 billion kWh
  consumption per capita:
    1,589 kWh (1993)


Economic Activity

Industries:

    textiles, shoes, chemicals, cement, lumber, mining (iron ore, tin), steel
    making, machine building - including aircraft, motor vehicles, motor vehicle
    parts and assemblies, and other machinery and equipment
Agriculture:
    accounts for 11% of GDP; world's largest producer and exporter of coffee and
    orange juice concentrate and second-largest exporter of soybeans; other
    products - rice, corn, sugarcane, cocoa, beef; self-sufficient in food,
    except for wheat

Exports:

    $43.6 billion (f.o.b., 1994 est.)
  Commodities:
    iron ore, soybean bran, orange juice, footwear, coffee, motor vehicle parts
   Major Trade Partners::
    EC 27.6%, Latin America 21.8%, US 17.4%, Japan 6.3% (1993)


Imports:

    $33.2 billion (f.o.b., 1994 est.)
  Commodities:
    crude oil, capital goods, chemical products, foodstuffs, coal
   Major Trade Partners::
    US 23.3%, EC 22.5%, Middle East 13.0%, Latin America 11.8%, Japan 6.5%
    (1993)
External debt:
    $134 billion (1994)