anding its presence
in world markets. From 2001-03 real wages fell and Brazil's economy
grew, on average only 2.2% per year, as the country absorbed a
series of domestic and international economic shocks. That Brazil
absorbed these shocks without financial collapse is a tribute to the
resiliency of the Brazilian economy and the economic program put in
place by former President CARDOSO and strengthened by President LULA
DA SILVA. Since 2004, Brazil has enjoyed more robust growth that
yielded increases in employment and real wages. The three pillars of
the economic program are a floating exchange rate, an
inflation-targeting regime, and tight fiscal policy, all reinforced
by a series of IMF programs. The currency depreciated sharply in
2001 and 2002, which contributed to a dramatic current account
adjustment; from 2003 to 2006, Brazil ran record trade surpluses and
recorded its first current account surpluses since 1992.
Productivity gains - particularly in agriculture - also contributed
to the surge in exports. While economic management has been good,
there remain important economic vulnerabilities. The most
significant are debt-related: the government's largely domestic debt
increased steadily from 1994 to 2003 - straining government finances
- before falling as a percentage of GDP in 2005. Brazil has improved
its debt profile over the past year by shifting its debt burden
toward real denominated and domestically held instruments. LULA DA
SILVA restated his commitment to fiscal austerity by maintaining the
country's primary surplus during the 2006 election and plans to pass
a package of further economic reforms upon entering office for his
second term. Another challenge is maintaining economic growth over a
period of time to generate employment and make the government debt
burden more manageable.

GDP (purchasing power parity):
$1.616 trillion (2006 est.)

GDP (official exchange rate):
$620.7 billion (2006 est.)

GDP - real growth rate:
3.1% (2006 est.)

GDP - per capita (PPP):
$8,600 (2006 est.)

GDP - composition by sector:
agriculture: 8%
industry: 38%
services: 54% (2006 est.)

Labor force:
96.34 million (2006 est.)

Labor force - by occupation:
agriculture: 20%
industry: 14%
services: 66% (2003 est.)

Unemployment rate:
9.6% (2006 est.)

Population below poverty line:
31% (2005)

Household income or consumption