Q:

What type of economic system does Brazil have?

A:

Economywatch.com describes Brazil's economy as a free market that is "organized along capitalist lines." Beginning in 2006, Brazil's economy became the largest in South America and ninth largest in the world as measured by purchasing power parity (PPP).

Manufacturing, particularly cars, aircraft, petrochemicals and construction, has historically been a key industry that helped to spur economic growth and accounted for almost three-quarters of the country's exports. Other key industries included textiles, food and beverage and consumer durables, and mining is also critical to the economy. The country also moved into the energy sector in an effort to reduce its dependence on imported oil. After severe bouts of inflation in the 1980s, President Cardoso attempted to revamp the economy, shifting more emphasis on foreign investment and private enterprise while public spending focused more on health, education and other public services.

The economy seemed to blossom fully in 2010 as the middle classes expanded significantly, and Cardoso's dream of foreign investment came true. Unfortunately, the growth did not appear sustainable as the government was unprepared to support the needs of the ever-growing middle class, and foreign investment leveled off.


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