Brazil on the Verge of Surpassing Italy to Become World's 7th Largest Economy

15th October 2010

The economy of Brazil will likely be larger than that of Italy next year, according to the latest data from the International Monetary Fund (IMF). Brazil is already the 8th-largest economy in the world and will likely become the 7th-largest next year, according to a Latin Business Chronicle analysis of the IMF projections.

It will keep that rank through 2015, IMF forecasts show.

Brazil's current size makes it larger than both Russia and India. Along with China they are grouped in the so called BRIC group of emerging market stars.

Brazil's GDP now stands at 2 trillion USD compared with 1.5 trillion for Russia and 1.4 trillion for India.

Next year, Brazil's GDP will likely grow to 2.2 trillion. That compares with 2.1 trillion for Italy. In 2015, it will grow to 2.8 trillion, the IMF forecasts.

The production of cars in Brazil is forecasted to grow 13.1% this year, more than the 6.5% expansion predicted previously according to the national automakers' association Anfavea. Output will probably end the year at 3.62 million units, Anfavea said.

Car exports continue to recover despite the strength of the Brazilian currency, but imports are still gaining ground amid the rapid strengthening of the real.

Anfavea upped its forecast to 750,000 exports this year, including assembled and unassembled vehicles, with revenue of 12.8 billion USD, from its previous estimate of 620,000.

"Economies overseas are recovering and they are absorbing more unassembled vehicles from Brazil," Anfavea President Cledorvino Belini said at a news conference. "Of course, we'd prefer to export assembled vehicles."

Car exports reached 569,524 in the first three quarters of this year, more than 76% higher than volumes for the year-ago period, Anfavea said.

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