Brazil’s exchange traded funds (ETFs) may ultimately look promising as the country rides the biggest economic expansion in three decades.
As this economy grows, Brazil has developed a new swagger that has provided it with greater leverage to push for a tougher bargain in trade talks with both the United States and Europe. Despite questions over just how much room for expansion there is actually left, some feel it could be a moot point.
According to Alexei Barrionuevo for The New York Times, Brazil’s growth has been fueled through a combination of respect for financial markets and targeted social programs, which are lifting millions out of poverty. With a history of unequal wealth, Brazil has shrunk its income gap by 6% since 2001, diminishing the unequal distribution of wealth. This is evident in income among the lower classes in Brazil. The bottom 10% of Brazil’s earners saw their income jump nearly 58% from 2001 to 2006 while the top 10% of earners only saw an increase of 7%.
Despite the numbers speaking for themselves, this economic expansion is expected by many experts to last. Nonetheless, a strong currency and inflation that has been kept in check for the most part has Brazilians spending rapidly, which acts as the motor for the economy. With the United States and Europe struggling with recession and housing crises, Brazil’s economy does not show the vulnerabilities of other emerging markets. It grew 5.4% last year.