Brazil Overview. ECONOMIES BY SIZE 2005 In US$ billions and population in millions GDPPop. Brazil$789.3184.2 Mexico$758.1107.0 Argentina$177.338.6 Venezuela$131.026.7.

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Brazil Overview Slide 2 ECONOMIES BY SIZE 2005 In US$ billions and population in millions GDPPop. Brazil$789.3184.2 Mexico$758.1107.0 Argentina$177.338.6 Venezuela$131.026.7 Colombia$112.346.0 Chile$100.716.1 Peru$77.227.9 Ecuador$32.113.0 Guatemala$27.412.7 Dom. Rep.$21.98.9 Costa Rica$19.64.3 El Salvador$16.56.9 Uruguay$16.43.4 Panama$14.53.2 Bolivia$9.38.9 Honduras$8.07.2 Paraguay$7.06.2 Nicaragua$5.05.8 Haiti$4.38.3 Total2,329.9*535.3* Latin American Market Slide 3 LATIN AMERICA GDP GROWTH Slide 4 Brazil- General datas Official languages - PortugueseOfficial languagesPortuguese Government - Presidential Federal republicGovernmentPresidentialFederal republic Area - Total 8,514,877 km (5th) 3,287,597 sq mi Area8,514,877 km5thsq mi Population - 2006 estimate188,078,261 (5th) - 2000 census 169,799,170 Population5th Density 22 /km (182nd) 57 /sq miDensity182nd GDP (PPP)2006 estimate - Total$1.616 trillion (9th) - GDPPPP9th Per capita $8,600 (68th)Per capita68th GDP (nominal) 2006 estimate - Total $943.6 billion (10th) - GDP10th Per capita $5,017 (64th)Per capita64th Slide 5 Etinics people 53.7% whitewhite 38.5% mixed racemixed race 6.2% blackblack 0.5% AsianAsian 0.4% AmerindianAmerindian 0.7% unspecified Slide 6 Poverty and economic inequality According to Fundao Getulio Vargas, in June 2006 the rate of poverty based into lacework was of 18.57% of the population - a 19.8% reduction during the previous four years.Fundao Getulio VargasJune 2006 Slide 7 Historic Inflation Slide 8 The country risk measured by J.P. Morgan has significant Drop in a short period. Reached 151 points in April, 16 th. Slide 9 Trade Surplus Slide 10 BRAZIL INTEREST RATE Slide 11 List by the International Monetary FundInternational Monetary Fund RankCountryGDP (PPP) $m 1United States12,229,276 2China8,817,394 1 1 3Japan3,946,090 4India3,729,533 5Germany2,436,004 6United Kingdom2,006,078 7France1,835,696 8Italy1,713,399 9 Brazil 1,594,482 10Russia1,576,226 11Spain1,140,929 12Mexico1,094,301 13Canada1,089,645 Slide 12 Market Outlook Slide 13 Statistics- Trade organizations: WTO and SACN GDP ranking 9th GDP (PPP) $1.507 trillion (2005) GDP growth 3,7% (2006) GDP per capita (PPP) $8,300 (2005) GDP per capita R$ 10.519,89 (2005) GDP by sector agriculture (10.1%) industry (38.6%) services (51.3%) (2004 est.) Inflation 3.14% (2006 est.) Pop below poverty line 20% ~40 million people Labour force 92.860.128 (2004) (50% of pop.) Labour force by occupation agriculture (20%) *industry (14%) *services (66%) (2003 est.) Unemployment 10.7% (Aug 2006 est.) Slide 14 Population by region- 2002 NORTH-EAST 49.212.500 (28%) SOUTH-EAST 75.047.000 (42%) NORTH 13.829.100 (8%) SOURCE: MIDIA DADOS 2002 SOUTH 25.890.000(15%) CENTER-WEST 12.211.400 (7%) Slide 15 Consumption Potential Index Source : ALPHA 2001 - 11 EDIO Slide 16 Population per age bracket Source: IBGE Census 2000 Slide 17 Avg. Family Income per Social Class US$ B211,4818.02 C6,6474.44 D3,5251.46 E B1 A2 A1 Class 2,1152.87 17,41,254.06 28,12,023.63 41,72,999.24 Minimum WageUS$ Source: Intermeios Project 2% 6% 11% 15% 38% 25% 3% Slide 18 % Classes per Region Main Markets Source: XLII Estudos Marplan Base 9 mercados Slide 19 Growth throughout 2005 It enters the categories of use, the growth throughout 2005 confirmed the biggest dynamism observed in the production of: Slide 20 Brazilian CTV market has achieved a historical record in last year. Television broadcast stations: 332 originating stations (plus 6,119 repeater stations) (2005) Televisions: 90.3% of the households (2003). TV Market Overview Slide 21 Brazilian Pay TV According to the Brazilian Pay TV Association (ABTA,) the Pay TV market in Brazil generated net revenues of an estimated US$ 2.1 billion for 2005, a significant increase when compared to US$ 1.7 billion for 2004. The total number of subscribers as of September 2005 was 3.9 million (3.8 percent increase over the previous quarter) and the industry estimated a total of 4.0 million subscribers in Brazil by year-end 2005. Slide 22 Telecom Overview Telephones - main lines in use: 19 million (1997) 39 million (2005) Telephones - mobile cellular: 4 million (1997) 80 million (2005) 96 million (2006) Telephone system: good working system domestic: extensive microwave radio relay system and a domestic satellite system with 64 earth stations international: 3 coaxial submarine cables; satellite earth stations - 3 Intelsat (Atlantic Ocean), 1 Inmarsat (Atlantic Ocean region east), connected by microwave relay system to MERCOSUR Brazilsat B3 satellite earth station Slide 23 MilhesPas200420052006 1China335393461 2US181208233** 3Rssia74126152 4ndia4876149* 5Brasil668699,9 6Japo919599,8 includes WLL; ** forecast A ndia atingiu em Mar/06 a marca de 89,9 milhes de celulares, superando o Brasil que em Mar/06 possua 89,4 milhes. Telecom Overview Slide 24 About 7,8 million of PCs will be sold by the end of 2006, A 38% growth when compared to 2005. The IT Data institute believes the growth will be 8% on average for the next years. IT MARKET OVERVIEW Slide 25 IT Market overview ). Internet Service Providers (ISPs): 197 (1999) Internet Users: 19,311,854 (2004) Slide 26 Automobile Production Year 19601970198019902000200320042005 Units42.619306.915933.152663.0841.361.7211.505.1391.862.7802.009.494 Evolution 620%204%-29%105%11%24%8% Slide 27 BRAZIL PARTNERS & BRIC Slide 28 Trading PartnersExports $137,471 billion f.o.b. (2006) Main partners USA 18.0% *Argentina 8.5% *China 6.1% *Netherlands 4.2% *Germany 4.1% (2006) Imports $91,394 billion f.o.b. (2006) Main Partners USA 16.2% *Argentina 8.8% *China 8.7% *Germany 7.1% *Nigeria 4.3% (2006) Slide 29 Economic Prospects for 2007 The market estimates that the Brazilian economy will grow 3.50% in 2007, and that the interest rate will end 2007 at 12%. The Brazilian government targeted the GDP growth as of 2007 by 4.5%, according to Guido Mantega.Guido Mantega Central Bank's inflation target for 2007 and 2008 stands at 4.5%, however Central Bank's inflation projection for 2007 is now at 4.13%. The market predicts an inflation of 4.06% for 2007 Market projection for the exchange rate at the end 2007 is R$2.25 for US$1.00. The market also estimates that the foreign trade surplus for 2007 will be US$ 38 billion, and that foreign direct investment will total US$ 16,1 billion. Slide 30 Evaluate CountryBrasilIndiaRussia Official languagesPortuguese Hindi, English and 21 other official languages Russian official throughout nation; 30 others co-official in particular regions Area Total8,514,877 km (5th)3,166,414 km (7th)17,075,400 km (1st) Population188,078,261 (5th)1,126,000,000 (2nd)142,400,000 (8th) Density22 /km (182nd)329 /km (31st)8.3 /km (209th) GDP (PPP)$1.616 trillion (9th)$4.042 trillion (4th)$1.723 trillion (9th1) Per capita$8,600 (68th)$3,737 (118th)$12,100 (62nd) HDI (2006) - Human Development Index 0.792 (medium) (69th)0.611 (medium) (126th)0.797 (medium) (65th) Slide 31 Why Brazil? It ranks among the worlds top dozen economies: 6th in population, 5th in geographical area, and among the top five recipients of direct investment by foreign companies. Brazil produces much of its own capital goods and is a major exporter of manufactured products. It is a leading producer of agricultural products, pulp and paper, steel, aircraft, and automobiles. The government is beginning a drive to invest in biotechnology. Brazil is auto sufficient in Petroleum and have the exclusive technology in Bioenergy to produce Ethanol Slide 32 THANK YOU