Brazil Property Benefits from Growing Wealth of Population

Brazilians are growing wealthier as the per capita income has now reached US$11,500. This is an increase of 6.5% on the previous year and this percentage is a massive increase on the annual average increase of 2.4% that the country enjoyed during the previous decade.

The investment rate in the country rose to 18.4% of the GDP which is nearly as high as 2008 when it reached 19.1%. Domestic savings are also rising, as is the country’s need for credit. The Brazilian property market is also benefiting as the internal population grows in wealth, the aspiration to become homeowners also increases.

The government here remains confident that the economy isn’t overheating as the economy grew by 0.7% during the last quarter of 2010.

The country enjoyed spectacular GDP growth of 7.5% last year which was largely due to a government stimulus program which reduced sales taxes and enabled more credit. This year the GDP growth is predicted to be a more normal 5% to 5.5%. Brazil is now thought to be the world’s seventh largest economy, with figures due to be released soon by the IMF expected to confirm this.

One side effect of this spectacular growth is that there was a 12.5% increase in taxes on production, indicating the need for tax reforms.

The United States also benefits from this strong economy as Brazil, alongside other developing nations such as China and India, is boosting US exports. This is creating jobs in the US and supporting manufacturing, high-tech industries and agriculture in the country. Part of the reason for this strong export market has to be the strength of the Brazilian real which is currently one of the strongest currencies in the world.

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