Brazil is set to become the world’s sixth largest economy this year, 2011. Its Gross Domestic Product, GDP, is expected to reach FCFA 1,169 trillion, ahead of the United Kingdom’s FCFA 1,164 trillion. The UK is expected to move from the sixth to the seventh position.
These projections that were published on the telegraph.co.uk news website on Monday 31 October, echo latest monthly forecasts from the Economist Intelligence Unit, EIU, rated the world’s leading resource for economic and business research, forecasting and analysis. The EIU analysis confirms forecasts given in 2010 after Brazil overtook Italy to occupy the seventh position.
For keen observers of the global economy, Brazil’s performance is not surprising, for it is one of the fastest-growing major economies with an annual average GDP growth rate of over 5 per cent. It recorded 7,5 per cent in 2010. Its industrial sector accounts for three fifths of the entire Latin American economy’s industrial production with industries ranging from automobiles, steel and petrochemicals to computers, aircraft and consumer durables. However, the service sector is the largest contributor to GDP at 66 per cent while agriculture contributes 6 per cent. Brazil’s main trade partners include China (15 per cent), United States (9,6 per cent), Argentina (9,2 per cent), Netherlands (5,1 per cent) and Germany (4 per cent).
According to Robert Wood, the EIU’s chief economist on Brazil, the country’s rush up the table owed much to a growing consumer class and a booming trade relationship with China, based on the Asian giant’s need for commodities such as soy and iron ore. It is partly the story of the lower income classes rising up in Brazil to join the middle-class and partly the sheer size of the population of nearly 200 million, the website said, citing Mr Wood. In effect, Brazil’s current 200 million population and abundant natural resources make it one of the ten largest markets in the world. This was confirmed by the Organisation of Economic Co-operation and Development, OECD in a survey released on Wednesday 26 October. It said domestic demand, spurred by strong investment, is likely to continue to sustain activity.
Another emerging economy, India, is rising at break-neck speed. According to the EIU, Brazil will lose its sixth place to India in 2013 but regain it in 2014, the year it will host the World Cup. That year, EIU forecasts, Brazil’s GDP will overtake that of France. After organising the Summer Olympic Games in 2016, Brazil’s economy will continue to rise as projections suggest it will become bigger than any economy in Europe by 2020 when it overtakes Germany to become the fifth biggest globally, after China (by then the world’s leading economy), the US, India and Japan. What a perfect inspiration for the economic emergence vision in Cameroon which now shares close trade ties with Brazil.
