Changes

== Economy ==

== Economy ==

Brazil's economy, aided by a benign international environment, grew approximately 2.9% in 2005 and 3.7% in 2006. (Note: In early 2007, the Brazilian Institute of Geography and Statistics (IBGE) revised its methodology for computing gross domestic product and announced revised figures for 2000-2006.) Sustained growth, coupled with booming exports, healthy external accounts, moderate inflation, decreasing unemployment, and reductions in the debt-to-GDP ratio. President Lula and his economic team have implemented prudent fiscal and monetary policies and have pursued necessary microeconomic reforms.

Brazil's economy, aided by a benign international environment, grew approximately 2.3% in 2005 and 4.7% in 2006. (Note: In early 2007, the Brazilian Institute of Geography and Statistics (IBGE) revised its methodology for computing gross domestic product and announced revised figures for 2000-2006.) Sustained growth, coupled with booming exports, healthy external accounts, moderate inflation, decreasing unemployment, and reductions in the debt-to-GDP ratio. President Lula and his economic team have implemented prudent fiscal and monetary policies and have pursued necessary microeconomic reforms.

Brazil has made progress but significant vulnerabilities remain. Despite registering year-on-year declines from 2004 to 2006, Brazil's (largely domestic) government debt remains high, at 50% of GDP. Total foreign debt, while falling, is still large in relation to Brazil's export base. Over time this concern will be reduced by healthy export growth, which has anchored the positive trade and current accounts. Personal incomes improved since 2004 after a significant decline over the previous decade. Income and land distribution remains skewed.

Brazil has made progress but significant vulnerabilities remain. Despite registering year-on-year declines from 2004 to 2006, Brazil's (largely domestic) government debt remains high, at 50% of GDP. Total foreign debt, while falling, is still large in relation to Brazil's export base. Over time this concern will be reduced by healthy export growth, which has anchored the positive trade and current accounts. Personal incomes improved since 2004 after a significant decline over the previous decade. Income and land distribution remains skewed.

In 2001, Brazil experienced an electricity crisis due to inadequate rainfall for its hydroelectric system and insufficient new investment in the sector. Mandatory rationing and price hikes were sufficient to prevent blackouts. The rationing system officially ended on March 1, 2002. Lula’s then-Energy Minister unveiled an energy plan in July 2003, which left many vital details undefined and most investors dissatisfied.

In 2001, Brazil experienced an electricity crisis due to inadequate rainfall for its hydroelectric system and insufficient new investment in the sector. Mandatory rationing and price hikes were sufficient to prevent blackouts. The rationing system officially ended on March 1, 2002. Lula’s then-Energy Minister unveiled an energy plan in July 2003, which left many vital details undefined and most investors dissatisfied.

The Government of Brazil has undertaken an ambitious program to reduce dependence on imported oil. In the mid-1980s, imports accounted for more than 70% of Brazil's oil and derivatives needs; the net figure is nearing zero. Brazil is expected to become a net exporter of oil in 2007 as output from the Campos Basin continues to increase. Brazil is one of the world's leading producers of hydroelectric power. Of its total installed electricity-generation capacity of 90,000 megawatts, hydropower accounts for 66,000 megawatts (74%).

The Government of Brazil has undertaken an ambitious program to reduce dependence on imported oil. In the mid-1940s, imports accounted for more than 70% of Brazil's oil and derivatives needs; the net figure is nearing zero. Brazil is expected to become a net exporter of oil in 2007 as output from the Campos Basin continues to increase. Brazil is one of the world's leading producers of hydroelectric power. Of its total installed electricity-generation capacity of 90,000 megawatts, hydropower accounts for 66,000 megawatts (74%).

Proven mineral resources are extensive. Large iron and manganese reserves are important sources of industrial raw materials and export earnings. Deposits of nickel, tin, chromite, bauxite, beryllium, copper, lead, tungsten, zinc, gold, and other minerals are exploited. High-quality, coking-grade coal required in the steel industry is in short supply.  

Proven mineral resources are extensive. Large iron and manganese reserves are important sources of industrial raw materials and export earnings. Deposits of nickel, tin, chromite, bauxite, beryllium, copper, lead, tungsten, zinc, gold, and other minerals are exploited. High-quality, coking-grade coal required in the steel industry is in short supply.

==History==

==History==