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Brazil has South America's largest economy and an emerging economy where investors hope to profit from growing industry and the increasing wealth of citizens. It is among the world's 10 largest economies.

Expanded Definition

Brazil has come a long way, and has a lot of potential for investors, but remains a bit of a wild card. The World Bank credits it with having "reached ... macroeconomic stability and significant reductions in poverty, income inequality and ... deforestation rates in the Amazon." But there also are high levels of poverty, a big gap between rich and poor, and inadequate access to education. The World Bank also cites deficient infrastructure, a poor business climate, high tax rates, and rigid labor markets.

But as early as November 2007, Fool analyst Tim Hanson was letting investors know that "Brazil has incredible potential to produce a sustained economic growth story and a vibrant middle class with it. It's simply a matter of leveraging its natural advantages ..."

Brazil stands to benefits from its raw materials. Brazil-based companies you may have heard of include Petrobras, an oil company, and Vale, which deals in iron ore and other metals.

Brazil is one of the emerging-economy BRIC countries -- Brazil, Russia, India, and China -- where analysts predict the economies will be major players in the world economy in the future, perhaps surpassing the world's current economic powerhouses by 2050.

Some facts about Brazil from the CIA World Factbook:

  • Population: 196 million.
  • Size: slightly smaller than the U.S.
  • Capital: Brasilia.
  • Compulsory voting for those age 19-69.
  • Gross domestic product by purchasing power parity: $2.03 trillion (2008 est.).
  • Per-capita GDP: $10,300.
  • Unemployment: 8% (2008 est.).
  • Natural resources include bauxite, gold, iron ore, manganese, nickel, phosphates, platinum, tin, uranium, petroleum, timber.

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