Economic history of Brazil
The economic history of Brazil covers vari-
ous economic events and traces the changes
in the Brazilian economy over the course of
the history of Brazil. Portugal, which first col-
onized the area in the 16th century, enforced
a colonial pact with Brazil, an imperial mer-
cantile policy, which drove development for
the subsequent three centuries. Important
structural
transformations began
in
the
1930s, when important steps were taken to
change Brazil into a modern, industrialized
economy.
A
socioeconomic
transformation
took
place rapidly after World War II. In the
1940s, only 31.3% of Brazil’s 41.2 million in-
habitants resided in towns and cities; by
1991, of the country’s 146.9 million inhabit-
ants 75.5% lived in cities, and Brazil had two
of the world’s largest metropolitan centers –
São Paulo and Rio de Janeiro. The share of
the primary sector in the gross national
product declined from 28% in 1947 to 11% in
1992. In the same 1947-92 period, the contri-
bution of industry to GNP increased from less
than 20% to 39%. The industrial sector pro-
duces a wide range of products for the do-
mestic market and for export, including con-
sumer goods, intermediate goods, and capital
goods.
Through the 1980s and 1990s, the Brazili-
an economy suffered from rampant inflation
that subdued economic growth. After several
failed economic initiatives created by the
government, in 1994 the Plano Real was in-
troduced. This plan brought stability and en-
abled Brazil to sustain economic growth over
that of the global economy through the com-
ing decade. Despite this rapid development
the country still suffers from high levels of
corruption, violent crime, functional illiteracy
and poverty.
Colonial period
Portugal’s exploitation of Brazil stemmed
from the European commercial expansion of
the fifteenth and sixteenth centuries. Blocked
from the lucrative hinterland trade with the
Far East, which was dominated by Italian cit-
ies, Portugal began in the early fifteenth
century to search for other routes t