Brazil Country profile

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Brazil is coming out of an economic crisis, sparked by slumping global commodity prices, steep inflationary pressure, fiscal policy mismanagement and political uncertainty. The economy contracted 3.9% and 3.6% in 2015 and 2016 respectively—the first time GDP fell in two consecutive years since 1931.

But prospects in 2017 improved, growth has resumed, driven by a rebound in commodity prices and demand for agriculture. Looking ahead, higher oil prices and expansionary fiscal policy are expected to push growth toward 2% over the next five years.

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Per capita income has more than doubled between 2004 and 2016 lifting Brazil to upper-middle-income status. The number of people living below the poverty line—defined as citizens earning less than US$1.90 a day—has fallen to 5% from 18% in 2006. Despite these improvements, inequality remains high—the richest 10% of the population holds 40% of total income. Stronger commodity and agriculture earnings should support the recovery in GDP per capita, particularly amongst poorer households.

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