Brazil and its 2.7% growth

For some the 2.7% growth rate in Brazil in 2011 was a disappointment especially when many market watchers have gotten us to Brazil hitting over 7% growth annually. Many countries in the G8 would be satisfied with Brazil's 2.7% growth, but when compared to its Brics Partners Russia, India, China and South Africa than at first glance it seems 2011 was a poor year for the Brazilian economy.

When Brazil was growing at over 7% then there were inflationary  pressures  on the Brazilian economy and generally it was felt that the economy was overheating. So the Brazilian government had to raise interest rates to dampen down  inflation, Brazil increased its interest rates from 9% to 12% to put the brakes on the economy. With these rising interest rates it generally means at the bottom end the consumer is paying closer to 20% interest on mortgages. With these higher interest rates, consumer consumption is lower so therefore helping keep a lid on inflation. With less consumption this means lower GDP growth    which goes a long way to explain lower GDP growth of 2.7% when compared to its Bric Partners Russia, India, China and South Africa.

Relative to the general world economy Brazil is in excellent health, Brazil is not highly leveraged, not indebted and has a big pent up consumer and government demand for infrastructure technology to support this fast growing Bric country. There's big demand in Brazil for Automobiles, Housing, Technology, Electronics, Garments/Textiles as pretty much everything is in demand in Brazil.

BricPartner States that in Brazil only 5% of Brazilian GDP comes from mortgages which makes Brazil one of the world's most un-leveage countries in the world, with the government doing well to slow inflation down then Brazil continues to be one of the worlds favorite destinations to do business.