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There is considerable race mixing and, genetically,

most Brazilians have some degree of European,
African, and/or Amerindian ancestry.
Language
Portuguese is the official and most widely spoken
language in Brazil. Less common languages include
Spanish (border areas and schools), German, Italian,
Japanese, English, and a large number of minor
Amerindian languages.
2.3.2

Government

Head of State: President Luiz Incio Lula da Silva

(since 1 January 2003); Vice President Jose Alencar
(since 1 January 2003). The President is both the
chief of state and head of government. He appoints
the Ministers of State (Cabinet). President Lula da
Silva was first elected on in October 2002, taking
office, on January 1, 2003. He was re-elected with
more than 60% of the votes in October 2006,
extending his term as President until the next
election which is due to be held in October 2010.
Following the 2006 elections, the Workers Party, or
Partido dos Trabalhadores (PT), is now the second
largest party in the Chamber of Deputies.
The President has put social programmes at the top
of his agenda, particularly the alleviation of
malnutrition which, according to the United Nations
Food and Agriculture Organization (FAO), currently
affects 15.6 million people in Brazil.
2.3.3 Economy
In 2007, Brazils Gross Domestic Product (GDP)
amounted to an estimated $1.8 trillion in terms of
purchasing power parity (PPP) - making it the ninth
largest in the world (and by far the largest in Latin
America). Brazil is regarded as one of the group of
four emerging global economies (Brazil, Russia,
India and China). Services generated almost two
thirds (65.8%) of the Gross Domestic Product (GDP)
in 2007, followed by industry (28.7%) and
agriculture (5.5%).

Brazil has the 9th largest

economy in the world

In 2007, the economy grew by 5.4% in real terms

over the previous year and is forecast to grow by
around 4.8% in 2008 and 4.5% in 2009, according to
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the
International
Monetary
Fund
(IMF).
Nevertheless, the countrys per capita income
about $5,300 (PPP) in 2007 is low by world
standards, and in 2005 an estimated 31% of the
population (2005) was living below the poverty line.
Unemployment remains relatively high at 9.3% in
2007, while, due largely to rising food prices, the
inflation rate is expected to rise to 6.4% in 2008, up
from 4.5% in 2007. A major challenge is to close the
widening gap between the rich and the poor.
While Brazil has the potential to become a major
global power, the countrys economic growth rate
has tended to be slower than that of its neighbours.
Boom years have been followed by periods of
economic crisis and near collapse. However, growth
has been steady since 2003-04, allowing the
Government to repay its debt of $30.4 billion (a
record sum at that time) to the IMF in full, two years
ahead of schedule, and to launch (in 2007) a fouryear plan to spend $300 billion to modernise its road
network, power plants and ports.

Brazil has potential to become

a major global player

Economic Indicators (2007 estimates)

GDP (purchasing power parity): $1.836 trillion
GDP (official exchange rate): $1.314 trillion
GDP real growth rate: 5.4%
GDP per capita (PPP): $9,700
GDP composition by sector: agriculture: 5.5%; industry: 28.7%; services: 65.8%
Labour force: 99.5million
Labour Force by occupation (2003 est.): agriculture: 20%; industry: 14%; services: 66%
Unemployment rate: 9.3%
Population below poverty line (2005 est.): 31%
Inflation rate (consumer prices): 4.5% annual average
Source: CIA World Factbook, 2008

2.3.4 Exchange Rates

Since July 1994, the modern real (code BRL), plural
reais, has been the national currency of Brazil. It is
subdivided into 100 centavos.
The real was pegged to the US dollar in 1994, but
following a series of adverse external and internal
financial events, the Central Bank changed the
exchange regime to a free-float in January 1999.
The currency suffered a gradual depreciation until
late 2002 (reaching a historic low of almost R$4 per
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US dollar in October of that year) but, since then

partly due to the governments policy of maintaining
orthodox macroeconomic policies the real has
been getting stronger against the dollar and, since the
beginning of 2005, most other world currencies as
well. Better exchange rates have encouraged the
Brazilian outbound market which is clearly very
sensitive to currency fluctuations.
Table 2:3
Exchange Rates against Major Currencies, 2003-08 (reals per currency)*
Currency

2003

2004

2005

2006

US Dollar
Euro
UK Pound

3.08
3.34
4.81

2.93
3.75
5.63

2.43
2.18
2.84
2.85
4.13
4.13
* mid-year rates

2007

2008

1.85
2.58
3.81

1.59
2.54
3.17

% Change
2003-08
- 48.4%
- 24.0%
- 34.1%

Source: OANDA.com

2.3.5

Annual Leave/Holidays

Employees have an average of four weeks annual

leave. In addition, there are 12 public holidays
during the year.
2.3.6

4 weeks paid leave

Visa Issues

Brazilian visitors do not require tourist visas for the

Schengen countries, the UK, Ireland or for most of
the rest of Europe. However, a visa is required for
travel to the United States.

2.4

Market Size and Characteristics

2.4.1

Outbound Travel

Due to widespread poverty, it is only the fairly

affluent who can afford to travel abroad on holiday.
Brazilians are more inclined to take holidays within
Brazil, rather than abroad.
For example, an
EMBRATUR (Instituto Brasileira de Turismo)
survey found that in 2006 only 3.9% of Brazilians
had taken a trip abroad, compared with 36.9% who
had travelled within the country.

Only the affluent can travel

Having peaked at over 3 million in 1997, outbound

travel from Brazil declined to a low of 2.3 million in
2002 due to a combination of economic, financial
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