Brazilian Economic Outlook

Inflating prices and a deflating currency have been to blame for this down turn.
             Environmental Factors.
             In the mid 1990's, the Brazilian government sought to open up the economy by moving many of the state run businesses into private hands. This led to a great change in the economy. It also opened up the for the Mercosur, a trade organization that partners Brazil, Argentina, Uruguay, and Paraguay, making their borders open to each other for free trade much like NAFTA does with the U.S., Canada, and Mexico. Brazil is also involved in a bilateral trade agreement with the U.S., the country to which it exports the most products.
             The election of "Lula" as president in 2002 brought about typical party divisions. Running on the basis that he would clean up the economy, he has been met with many naysayers. Some believe that it is only a matter of time before the economy returns to normal, but others believe that it will take to much time, if at all.
             Business profits and income tax are taxed on a percentage basis. Corporate taxes are at 15% on profits below $80,000, but are 25% on anything above that. Incomes are taxed in almost the same way, but income taxes vary by Brazilian state. Corporate taxes vary by state also, because some state has value added taxes with varying rates of 7-25%.
             Socially, Brazil is much like the U.S., but as previously mentioned is very racially diverse. Tastes in fashion and food are similar to that in the states. Most of the people live in urban areas near large cities, mostly in the northeast region. .
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             Economic Climate.
             Introduction.
             As are most countries in the world, the Brazilian economy is currently in a decline. The national currency, the real, has depreciated since 1999 due to a domestic energy crisis in 2001, a Russian debt currency crisis in 1998, and a number of economic crises in surrounding South American countries. Before 1999, the real had helped to stabilize and revitalize the economy after its introduction in 1994 (Before the introduction of the real, inflation had risen as high as 5000%).