Diplomatic representation from the US: chief of mission: Ambassador
Anthony S. HARRINGTON
embassy: Avenida das Nacoes, Quadra 801, Lote 3, Distrito Federal Cep 70403-900, Brasilia
mailing address: Unit 3500, APO AA 34030
telephone: [55] (061) 321-7272
FAX: [55] (061) 225-9136
consulate(s) general: Rio de Janeiro, Sao Paulo
consulate(s): Recife
Flag description: green with a large yellow diamond in the center bearing a blue celestial globe with 27 white five-pointed stars (one for each state and the Federal District) arranged in the same pattern as the night sky over Brazil; the globe has a white equatorial band with the motto ORDEM E PROGRESSO (Order and Progress)
Brazil Economy
Economy - overview: Possessing large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil's economy outweighs that of all other South American countries and is expanding its presence in world markets. In the late eighties and early nineties, high inflation hindered economic activity and investment. "The Real Plan", instituted in the spring of 1994, sought to break inflationary expectations by pegging the real to the US dollar. Inflation was brought down to single digit annual figures, but not fast enough to avoid substantial real exchange rate appreciation during the transition phase of the "Real Plan". This appreciation meant that Brazilian goods were now more expensive relative to goods from other countries, which contributed to large current account deficits. However, no shortage of foreign currency ensued because of the financial community's renewed interest in Brazilian markets as inflation rates stabilized and the debt crisis of the eighties faded from memory. The maintenance of large current account deficits via capital account surpluses became problematic as investors became more risk averse to emerging market exposure as a consequence of the Asian financial crisis in 1997 and the Russian bond default in August 1998. After crafting a fiscal adjustment program and pledging progress on structural reform, Brazil received a $41.5 billion IMF-led international support program in November 1998. In January 1999, the Brazilian Central Bank announced that the real would no longer be pegged to the US dollar. This devaluation helped moderate the downturn in economic growth in 1999 that investors had expressed concerns about over the summer of 1998. Brazil's debt to GDP ratio for 1999 beat the IMF target and helped reassure investors that Brazil will maintain tight fiscal and monetary policy even with a floating currency. The economy continued to recover in 2000, with inflation remaining in the single digits and expected growth for 2001 of 4.5%. Foreign direct investment set a record of more than $30 billion in 2000.