Inflation Rate and Economic Stability of Brazil

Inflation Rate and Economic Stability of brazil-nut tree first appearanceThis paper is tie ined with the economic consideration of one of the South American countries and analyzes the bear upon of an economic concern on that detail South American dry land that has been chosen and identifies the thin of the economic concern with in specified region on the basis of data sets accumulate from the source. The south American countries has major impact on American preservation and the economic concern of one of an important field raise our body of knowledge regarding the economic social movement in that particular nation and its impact on overall sparing as well.South American CountryThe providence of South America consists of twelve nations with three territories and arrest of 6% of population in the world. I have choose Brazil among other South American countries as Brazil is the largest South American country andBrazil is one of the fastest growing economies of the world. It is ranked at fifth spot in the world regarding population and geographical region and fifth largest economy regarding GDP in the world. The economic concern of Brazil is effectively contributes to world economy and interesting trend of economy can be seen. (Abreu, 2005).Economic maintenanceAmong four economic concern including GDP, quantities of specificGoods and services gross Domestic Product (GDP), and unemployment pretentiousness I have selected pomposity. Inflation is an important economic concern that go away effect the economy in great extend and lump straddle of a country economy is an important indicator for a country growth prospective. Inflation means rise in the general price level of the country and loss the real value of money as few commodities will bought with each additional unit of currency.Inflation directly relate to the economic productivity and has positive and negative both effect on economy as it create economic uncertainty which may discourage saving and investment. High prices of general commodities and hoarding will be its largest disadvantage. In positive aesthesis it may encourage non monetary investment. But the inflation rate needs to be control in order to sustain country economy.Inflation trend in BrazilThe inflation rate in Brazil is fluctuating over the geezerhood. No consistent trend can be seen in the inflation rate ac past year data support this assumption. According to the data displayed by ( IPCA) in 2002 the inflation rate was 12.53% that is quite high rate. therefore the decreasing trend of inflation rate can be seen in Brazil economy as 9.3% in 2003, 7.6% in 2004, 5.69% in 2005, and 3.14% in 2006 that is to the lowest degree in this decade. indeed the slight increasing trend can be seen in rate of inflation. 4.46% can be seen in 2007 and 5.91 in 2008. The fluctuating trend can be seen in this range in coming years as well. (Inflation Statistical table)Statistical TableInflation (IPCA)200212.53%20039.30%20 047.60%20055.69%20063.14%20074.46%20085.91%Past two years Inflation TrendPast two years monthly inflation rate trend can be seen from this graph that shows the monthly frequency of the inflation rate. The graph bars shows the trend of inflation from year 2011 that is 6.01%. The increasing slope can be seen from March, 2011 up to October, 2011. Inflation rate at the month of October is the highest that is 7.31%. Then the control implementation on inflation increasing trend can be seen from 7.31% to the deep low rate at 4.92% in July, 2012 that is complemented to Brazil economy. The upward Trent at semi annual bases can be seen in Brazil economy. The last recorded inflation rate of 6.15% that is quite high. Brazil government target area inflation rate is 4.5% with the plus and minus tolerance margin of 2% in it. The high inflation trend is important consideration for the government as increasing inflation rate affect the economy in deep roots and make the investment and saving chal lenging. People purchasing power will be effected that will effect their standard of living and indulge the poverty level in the country as commodities will be difficult to purchase with even more money in hand because due to inflation country will lose its real money value. (De Paiva Abreu, 2005).According to IBGE reveal it is recorded from 1980 the Brazil inflation trend has gone through various fluctuations. Historical data shows average of 411.8 % Brazil inflation rate that reached at highest rate of inflation of 6821.3 % in April 1990 that was the highest rate for all time. The low inflation rate of 1.7 percent was found in December 1998. The measure used to calculate inflation is consumer price index. Brazil important contribution in consumer price index are tobacco, food and alcohol that covers 31% of total, 15 percent by charge sector and communication carries 5 %. . (Brazil Inflation Rate)Statistical Evidence comparing various countries inflation rateInflation Rate of var ious countries is showing the Brazil high rate of inflation as compare to other countries except India that has the inflation Rate o f 6.62. An increasing trend is quite glowering for Brazilian government for economic growth and required close consideration to control the rate in future in order to steady the economy. findingThe Inflation rate and economic stability are closely related to one another and required close concern in order to stabilize the economy. Brazil increasing trend provide the threatening for its future concerns and shows that the government need to closely consider this regime in order to stabilize the economy and to achieve the economical growth in the world.