The Brazilian Financial Crisis
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Code : ECC0002
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Region : Brazil |
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Introduction: In the 19th century, Brazil was the world's largest exporter of primary products. Structural reforms were made in the 1930s, to diversify Brazil into a semi-industrialised economy. With the genesis of manufacturing industries, the growth rates of the economy increased. From 1964 to 1985, when Brazil was under military regime, there was a considerable increase in exports. But after the change of regime, the Brazilian economy had a slow growth and a high inflation. To control the inflation, the then Minister of Finance, Fernando Henrique Cardoso launched the 'Real' Plan in January 1994. This plan was conducted in three phases and it introduced a new currency, the real, which was pegged to the U.S. dollar. Following the 'real' plan, the inflation gradually declined and the economic growth stabilized. |
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