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
    +4

    Comment number 93.

    @5.JohnD
    2 Hours ago

    ..(massive) deforestation; especially of the rain forests.

    .. I see nobody linking this with rising CO2.

    Am I missing something,

    Yes you are, the effects of & reducing deforestation are a major part of climate change deals & an area where there's been some success. Brazilian deforestation has decreased by 75% since 2004 though is still an alarming 7000sqkm per yr

  • rate this
    +2

    Comment number 92.

    And Just for PulpGrape-As an officer who often works the 'Non EU' desk,the flow of Brazilians stating 'here to study' and the enforcement teams who catch the overstaying Brazilians illegally working here-ask yourself why there are a lot more Brazilians overstaying here to work than UK Nationals overstaying in Brazil to work(we don't get flights with UK nationals who have been deported from Brazil)

  • rate this
    +5

    Comment number 91.

    Look, like previously mentioned what difference does it make. I have no problem with Brazil or Brazilians, but if having a larger economy is based on minerals etc not technical innovation, plus the vast majority of the population living in absolute poverty is classed as progress then no comment. India, china are the same. Of course they are growing we did this in the 18th century!

  • rate this
    0

    Comment number 90.

    53.sambozauk

    Yes, people don't seem to have seen CITY OF GOD. And if they have, they probably thought it was all fiction, which of course it wasn't.

    Question is, can such growth be sustainable? If Britain uses up the equivalent of 2 Earths in terms of resources, imagine what China, India, Brazil will require, just to survive. Living standards for ALL will fall.

  • rate this
    +18

    Comment number 89.

    They may be booming now but the economy of Brazil isn't fundamentally different to that of the rest of the world and so they are still trapped in the same cycle of boom and bust - they would do well not to forget that. Sustainable growth is a myth when you live on a world with finite resources.

  • rate this
    +2

    Comment number 88.

    Will they now start sending us money when we become a third world nation??

  • rate this
    +2

    Comment number 87.

    And, they're still chopping down forest the size of Wales each year! 'Green' policies are a complete waste of time when the 'lungs of the Earth' are being surgically removed at such an alarming rate. But then crops for bio-fuels are much more profitable that forests!

    I'm really quite glad that the results of all these activities will come to fruition after I've gone!

  • rate this
    +4

    Comment number 86.

    The EU remains the world's largest economy

  • rate this
    -14

    Comment number 85.

    Countries like UK,Italy will suffer more in coming years until they stop helping the US for so called War against terrorism. These countries are amassing curse of people of Iraq and Afghanistan.Congrats to Brazil

  • rate this
    +26

    Comment number 84.

    Brazil has huge natural resources, and therefore we might expect its economy to be one of the biggest. What the UK must ensure is that it grows its exports to this expanding market and not be left behind again.

  • rate this
    -1

    Comment number 83.

    Well done Brazil a great country and beautiful people

  • rate this
    +7

    Comment number 82.

    We need to manufacture. We have the skills, infrastructure and markets. We also have the advantage of rising oil and foreign labour prices. I think its time for a manufacturing renaissance in the UK.

    Problem is, no one is taking this opportunity. We are a capitalist society without any bloody capitalists!

  • rate this
    +40

    Comment number 81.

    Brazil has a population od 190 million people. The UK has only 70 million, we are punching well above our weight! Plus i think our standard of living and education is much higher. Though alot of the people that moan on this website won't agree?? Then again they think that poverty is only having a freeview box and to shop at Aldi instead of Sainsburys.........

  • rate this
    +2

    Comment number 80.

    Pulpegrape we dont need to go and take a look face to face. As part of my geography course we studied brazil, its environment, economy the people that lived there. We watched programs specially made for our course by the exam board to give us the facts we needed. But they're all wrong and your the only one with any knowledge of Brazil i suppose. I dont need to leave British shores to know Brazil.

  • rate this
    +10

    Comment number 79.

    So why do we still send them aid?

  • rate this
    +24

    Comment number 78.

    I'd rather be poor in Britain than poor in Brazil...

  • rate this
    +4

    Comment number 77.

    Brazil economy should be bigger many years before.
    Considering it's territory size and natural wealth, it can be the biggest in the world, but as have been stated they explored the natural who knows commodits are going to stay high for so long.
    Brazil is highly dependent on China's growth, if a economic problem happens there this country go bust.

  • rate this
    +5

    Comment number 76.

    4.PulpGrape

    200m people there now share slightly more than the 65m share here.

    I'm sure your right, being at the top there is better than being at the bottom here, but the middle of the pack here is still way ahead of most other places.

  • rate this
    +3

    Comment number 75.

    like most people here are saying they rape their own lands and peoples to get where they are. How long can that last?

  • rate this
    +1

    Comment number 74.

    People still don't seem to understand that the days of never ending growth, and improving living standards, for the UK and other western countries is over.

    We can no longer keep borrowing money, at a national or personal level, to fund our lavish lifestyles and we now have to start to live within our means.

    Time to cut back the state, pay off our debts and accept our new place in the world.

 

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