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Brazil's economy is the largest in Latin America, and eighth largest in the world. Its gross domestic product went up by 9% in 2010. This was higher than the 8.5% that had been projected by most analysts. This was the quickest growth rate since 1996 according to government sources. Bonds yields went higher and the Central Bank had to adjust interest rates higher to prevent overheating. Economic indicators like unemployment data, retail sales and industrial production outperformed analysts' expectations, and the Central Bank had to tighten control to avoid a rise in inflation.
The first quarter was the peak of economic recovery, although this was expected to slow down. Agriculture and industry were the main sectors driving economic growth (Allister, 2010). Analysts point out that Brazil has been insulated from Europe's debt crisis and the slow economic recovery of the U.S. because much of its economy is driven by domestic consumer demand.
In terms of economic growth, Brazil is only second to China amongst the BRIC countries, which grew by 11.9% in the same year. India registered 8.6% growth, while Russia recorded 2.9% during the same period (Bristow, 2010). Analysts predicted that the end of tax cuts, higher interest rates, and the euro-zone crisis would help Brazil's economic growth slow to a "sustainable" level. U.S. president Barack Obama welcomed Brazil's rise as an economic power, and said that the U.S. would be a ready market for Brazil's oil exports (Kuhnhenn, 2011).
Brazil has emerged as a strategic economic power house for the United States, especially due to its increasing influence on world affairs and considerable independence from Washington. U.S. policies still impose tariffs on Brazilian goods, including ethanol and cotton, a point that was raised by Brazilian president Dilma Rouseff. Due to its increased economic influence, Brazil has also been pushing for permanent membership in the U.N Security Council.