Brazil 'overtakes UK's economy'

 
Brazilian President Dilma Rousseff joins workers to celebrate the construction of a new oil rig The Brazilian economy is still booming, despite the global economic slowdown

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Brazil has become the sixth-biggest economy in the world, the country's finance minister has said.

The Latin American nation's economy grew 2.7% last year, official figures show, more than the UK's 0.8% growth.

The National Institute of Economic and Social Research (NIESR) and other economic forecasters also said that Brazil had now overtaken the UK.

The Brazilian economy is now worth $2.5tn (£1.6tn), according to Finance Minister Guido Mantega.

But Mr Mantega was keen to play down the symbolic transition - which comes after China officially overtook Japan as the world's second-biggest economy last year.

"It is not important to be the world's sixth-biggest economy, but to be among the most dynamic economies, and with sustainable growth," he said.

Brazil is enjoying an economic boom because of high food and oil prices, which has led to rapid growth.

In 2010, the Brazilian economy was worth $2.09tn, compared with the UK's $2.25tn total output, in current US dollars, according to the International Monetary Fund.

However, according to NIESR, using the IMF's figures at current exchange rates, Brazil's economy is now $2.52tn and the UK's is $2.48tn.

The larger increase in the nominal size of both economies is explained by domestic inflation.

The Centre for Economics and Business Research has also said that Brazil's economy has overtaken the UK's.

A UK Treasury spokesman said: "Strong economic growth and large populations in the big emerging economies mean that some will catch up with advanced economies like the UK. This shows why the government is right to place high importance on its economic ties with large emerging economies."

Oil production

In the fourth quarter of last year, Brazil's economy grew by 0.3% from the previous quarter, according to Instituto Brasileiro de Geografia de Estatistica.

Will Landers, BlackRock Latin American Fund says "more and more people are investing in Brazil"

Both the annual and quarterly figures were less than analysts had predicted.

Brazilian President Dilma Rousseff has attributed the slowdown in growth last year mainly to the weak global economic situation and the need to fight rising inflation.

Brazil, the largest Latin American economy and one of the so-called Bric nations together with Russia, India and China, has seen its economy soar in recent years, with growth far outpacing the US and western Europe, but sending inflation higher.

The currency, the real, fell 11% against the US dollar last year.

That is after two years of huge gains - up 5% in 2010 and 34% in 2009. The currency is worth more than double what it was 10 years ago.

With substantial oil and gas reserves continuing to be discovered off Brazil's coast in recent years, the country is now the world's ninth largest oil producer, and the government wishes to ultimately enter the top five.

Brazil has about 190 million people, in contrast to the UK's 60 million people.

And the country has struggled with inequality. The country's Gini coefficient, a measure of income inequality, peaked at 0.61 in 1990 - but 2010's figure was a historic low of 0.53.

Absolute and relative poverty have declined in recent years, especially in the past decade, during which the poorest 50% saw their incomes go up by 68%, according to the Getulio Vargas Foundation.

The country will host the 2014 World Cup, and Rio de Janeiro will be home to the 2016 summer Olympics.

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  • rate this
    -1

    Comment number 13.

    @11

    No one is doubting that there is still abject poverty in Brazil because there is, I saw it first hand. However, the UK also has this and the big difference is that while millions are being brought out of poverty in Brazil, millions here are being put into it. You also dont have to heat your homes out there or worry about rising water bills due to apparent "lack of rain".

  • rate this
    -2

    Comment number 12.

    @11 - This country is poor!

    They are only some riches that are more riches than the average wealth nations, most of the population live pretty bad.

    Bad infrustructure, education, public health chaos, low paid jobs for most of the population.

    Have you ever lived in THE UK !

  • rate this
    +6

    Comment number 11.

    This country is poor!
    They are only some riches that are more riches than the average wealth nations, most of the population live pretty bad.
    Bad infrustructure, education, public health chaos, low paid jobs for most of the population. Have you ever lived in FAVELA?

  • rate this
    +2

    Comment number 10.

    @ JohnD
    So according to your thought process, Britain should never have touched the Coal mines which powered the Industrial Revolution? Have a think about how Empires are built, then go back to your question on profits vs humanity.
    Also, The article suggests the growth was due to oil and gas reserves "OFF THE COAST", ie not under any forrest!

  • rate this
    +4

    Comment number 9.

    @ 4. PulpGrape
    ....'construction in overdrive ....
    //////////
    Now that usually ends in tears!

  • rate this
    +4

    Comment number 8.

    5.JohnD
    26 Minutes ago
    What people dont realise, is that this is down to mineral extraction, and accompanying (massive) deforestation; especially of the rain forests.

    I live in Nottingham, and apparently from here to Doncaster use to be dense forest a few hundred years back with much now extint wildlife. This is the reality of development.

  • rate this
    -1

    Comment number 7.

    Are Brazil in reciept ofany past / present / future International Aid Monies? If yes, will they be paying it back? I imagine those that know how to exploit a country's natural reserves have been in situ for quite a long time...

  • rate this
    +11

    Comment number 6.

    5.JohnD

    I agree with your comments John but it should also be pointed out that the Brazilian Government has done a lot in the past few years to combat deforestation, logging and destruction of the rain forests. In fact it has been the most successful environmental campaign in decades. Long way to go though.

  • rate this
    +96

    Comment number 5.

    What people dont realise, is that this is down to mineral extraction, and accompanying (massive) deforestation; especially of the rain forests.

    We have been taught for as long as I can remember that these are the lungs of the Earth.

    Despite this, I see nobody linking this with rising CO2.

    Am I missing something, or is profit more important than humanity...

  • rate this
    +6

    Comment number 4.

    Having returned from Brazil last month I can safely say I know where I would much rather be right now and it sure isnt here in London.

    Brazil is booming and they are embracing it the right way too. Jobs created everywhere, construction in overdrive and exceptional customer service wherever you go. Even McDonalds have maitre'd's there. A far cry from self service Britain.

  • rate this
    +1

    Comment number 3.

    It's so annoying how some measurements are in GDP (nominal) and PPP... Surely PPP is a more accurate size of an economy... that places India now ahead of Japan... and takes away the currency fluctuations involved in calculating economic size. Good for Brazil by the way... inevitably they will overtake many nations with over 200million people.

  • rate this
    +60

    Comment number 2.

    What does it matter if the Brazilian economy has overtaken ours in size or not? If it means living standards over there are increasing and thousands of people are being taken out of poverty, good luck to them!

  • rate this
    -2

    Comment number 1.

    So what this report is kind of saying, is they got it wrong and the UK still remains in 5th place. Can never tell the growth in economics, and I am confident that the UK economy will get back to growth in the next 18-24 months.

 

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