Financial analysts raised Brazil’s gross domestic product (GDP) forecast to 7.2 per cent from a previous projection of 7.13 per cent for the year. Brazil’s economy grew by 9 per cent year-on-year, in the first quarter of 2010, its fastest rate in 14 years, with the agriculture and industry sector led the growth in GDP. 

The global economic crisis saw foreign investments and demand for domestic goods dwindle however, Brazil’s economy recovered quickly, reaching positive levels.

Brazil’s economy, the largest in Latin America, is driven primarily by domestic consumer goods. This means that it remains relatively insulated from the global economic downturn.

However, Brazil’s burgeoning current account deficit is worrying analysts. While it has narrowed in May from April, the current account deficit is expected to grow to US$50 billion (*S$69 billion) due to slow global recovery.

Brazil’s trade surplus increased to US$3.44 billion in May, up from US$1.28 billion in April. This increase is attributed to Brazil’s huge grain and oilseeds harvest which drove export growth of agricultural commodities up. 

*Exchange rate correct as at 12 July 2010