About Brazil

Brazil (officially the Federative Republic of Brazil) is a federal republic with a president, a
National Congress, and a judiciary. From 1888 until recently, the country struggled with
democracy. The military government was peacefully removed in 1985, and by 1995,
Brazil's politics and economy had become fairly stable. Brazil is also South America's
most industrial nation, producing chemicals, steel, aircraft, and cars.
Form Of Government: Democratic federal republic
Capital: Brasilia
Population: 183,888,841
Official Language: Portuguese
Currency: Brazil Realis (1 Brl=$0.307)
Area: 8,511,965 square kilometers
GDP: $1,798,622 million (2016)
Unemployment rate: 13.7 %
Economic performance

Brazil's economic and social progress between 2003 and 2014, macroeconomic stability
steadily developed, 29 million people was going out of poverty and inequality dropped
significantly (the Gini index1 decreased by 6.6 percentage point, from 58.1 down to 51.5).
However, the rate of reduction of poverty and inequality have stagnated since 2015.The
country is currently getting through an abstruse stagnation. The growth rate of Brazil has
decreased steadily since the beginning of this decade, from an average annual growth of 4.5%
between 2006 and 2010 to 2.1% between 2011 and 2014. GDP contracted by 3.8% in 2015,
and decreased by 3.3 % in 2016. The basic reason of economic crisis is the fall in commodity
prices and because of political crisis in the country
The governments cannot take effective action to adjust the country to the crisis and it results
also loss of confidence of investors and consumer as a result the crisis went deeper. The
impeachment of President Dilma Rousseff on August 31st (2016), former Vice President Michel
Temer took office as the new President of Brazil. He said that in order to achieve confidence of
investors and consumers he would do some fiscal adjustments and pursue a reform agenda.
However, enforcement of the reform program experienced some difficulty and faces opposition
in Congress.
The crisis caused several adjustments in the balance of payment account such as in the
beginning of 2016 current account deficit has decreased 1.3% from 4.3% in 2014 (the worst
measurement of current years).
Budgetary instutions

In the principal-agent model, in turn, the spending decisions are delegated by the principal
to an agent, through explicit or implicit contracts. This relationship is present both among

1 The Gini index is a measurement of the income distribution of a country's

residents(ranging between 0 100 percentage point )
voters (principal) and the government (agent) as well as within government, between the
Minister of Finance (principal) and the other ministers (agent). Thus, budgetary institutions
can broaden or restrict these incentives, which lead to different fiscal results with respect to
the size of the budget, its composition and the form of funding. 4 In particular, budgetary
institutions that centralise the decision-making process tend to reduce the problem of the
common pool and produce better fiscal results. Transparency and control tend to mitigate
the principal-agent problem.

Budget formulation process

https://www.oecd.org/brazil/40139608.pdf
Analysis of the budget
Pdf informal economy budget analaysis brazil

References
http://www.worldbank.org/en/country/brazil/overview
http://www.sciencedirect.com/science/article/pii/S151775801500020X article named
Budget institutions and fiscal performance of the Brazilian Federal Government by Ana
Carolina Giuberti

https://www.oecd.org/brazil/40139608.pdf article named Budgeting in brazil by Jn R.

Blndal, Chiara Goretti and Jens Kromann Kristensen
http://www.tradingeconomics.com/brazil/indicators
https://www.cia.gov/library/publications/the-world-factbook/geos/br.html
http://www.imf.org/external/country/BRA/