Brazil: The Largest Economy In South America

Brazil is by far the largest economy in South America. It has a population of over 204 million people and a labor force of 110 million. Throughout the last couple decades, Brazil has focused on expanding its middle class, creating a larger skilled workforce and a larger consumer base; and although the country is one of the most resourceful in the world, corruption and bureaucracy are still intricately related with the country’s business environment. The country had a high growth rate during the first decade of the millennium, but this growth has slowed exponentially and unemployment has been on a steady rise, after the commodity crisis and the world financial crisis. The country recovered and reached a historically high GDP growth rate of 7.5%, of which has been shrinking over the past couple years. According to the IMF, Brazil’s economy will shrink 1.5% in the next year. Most recent problems that arose are due to the governments increasing massive deficit and the unsustainable growth model with which the country has grown.

The problem this has created though, because it was done in such a populist mindset, is colossal. The government has been, implementing measures in which it gives and asks for nothing back from the population, creating a dependency chain that is one of the facets of the deficit problem in the country. Another facet of the deficit problem and high taxes within Brazil, is the size of the government. Almost one third of government officials are not qualified to be in the positions they fill, and did not undergo any selection process, causing an inflation of the system, that cannot maintain itself even with one of the highest tax rates in the