PESTLE Analysis of Brazil

Pestle analysis of Brazil. The Federative Republic of Brazil is a South American country, and it’s the largest country in Latin America. It shares the border with all other South American countries except Chile and Ecuador. The capital of the country is Brasilia, and Sao Paulo is her largest city.

The total area of Brazil is 3,287,956 square miles, and it’s the 5th largest country in the world in terms of size and area. Approximately more than 210,147,125 people are populating the country, and it’s the 6th world’s most populated country.

Various tribal nations inhabited Brazil over time in history. However, western Portuguese colonists came to Brazil and colonized the country in 1500. It became the United Kingdom of Portugal, Brazil, and the Algarves in 1815. The country achieved its independence in 1822 and became the Empire of Brazil.

Brazil became a presidential republic country with the help of a military coup in 1889. An authoritarian military dictatorship ruled the country from 1964 to 1985. The civilian government created the federal republic country in 1988.

Today, we’ll discuss the pestle analysis of Brazil. It’s going to analyze the macro-environmental factors impacting the world’s middle-income country. For internal factors, checkout the swot analysis of Brazil. Here’s the pestle analysis of Brazil as follows;

Political factors affecting Brazil

Government System

Brazil follows the federal republic democratic system of government and administration. The country comprises federal districts and 26 states. However, she falls under the category of the world’s middle-income countries. It gives the country some influence in global affairs.

It’s worth noting it here that Brazil has one of the world’s largest democracies. It means that the country has a bigger consumer market. That’s why some experts suggest that the Latin American country has great growth potential. Even she could become the superpower of the world.

Alliances

Brazil has very good diplomatic relations with the US and other neighboring countries like Argentina and Venezuela. Other than that, the country has membership in the world’s leading institutions like the United Nations, OECD, BRICS, Mercosul, G20, WTO, World Bank, International Monetary Funds, Organization of Portuguese language countries, and Organization of Ibero-American States.

Corruption

Corruption is a severe issue that Brazil is facing today. According to the ranking of Transparency International, Brazil falls at the 94th position out of 180 countries. The government has been taking steps to reduce the corruption level. They did decrease the corruption level and improved her ranking dropped from 105 to 94 during the period of 2019 to 2020.

Economical factors impacting Brazil 

GDP

According to an estimate, the annual nominal GDP of Brazil in 2020 was 1.363 trillion dollars, and it’s 13th world’s highest. Out of which, the per capita income of the country was 6450 dollars, and it’s 83rd world’s highest.

However, Brazil was barely recovering from the economic recession of 2015. Now the pandemic crisis happened, and it has further dropped her income and growth.

Productive Industries

Brazil falls under the category of the world’s leading coffee-producing countries. According to an estimate, Brazil would produce approximately 32.99 million bags in 2021-2022. However, the country had produced an all-time high of 55 million coffee bags in 2016-2017.

Sugar is the second most powerful industry and the country exports it to over 100 countries worldwide. According to an estimate, Brazil exports 75% of the home-produced sugar and uses only 25% of it.

Imports & Exports

Brazil’s main exports are cars, raw sugar, crude petroleum, iron ore, and soybeans. She exports it to Germany, Netherland, Argentina, the USA, and China.

However, the country’s main imports are cars, integrated circuits, medicine packaging and medicines, spare parts of vehicles, and refined petroleum. She imports it from South Korea, Germany, Argentina, the USA, and China.

FDI

Brazil receives the world’s highest foreign direct investment. As we know Brazil has a membership of BRICS (Brazil, Russia, India, China, and South Africa), and the objective of this alliance for Brazil is to increase the foreign investment rate.

Taxes & Unemployment

According to an estimate, the unemployment rate of Brazil in 2020 was 13.371% and it would reach 14.125% due to the post-pandemic economic impact. However, 27.50% is the personal income tax of the country in 2021, and the corporate rate is 34%.

Social factors affecting Brazil 

Demography

Approximately over 210 million people are populating the country, and it’s one of the world’s highest diverse countries. More than 88.8% of the people believe in Christianity, 8% of the people are atheists, and 2% of the people believe in Spiritism. Portuguese is the spoken, national, and official language of the country. However, the average life of men and women is 72 and 79 years old.

Poverty & Crime Rate

Brazil has progressed economically for the past few years, and the government has brought millions of people out of the misery of poverty. According to an estimate, roundabout over 10% of the country’s population is still living under the poverty line.

However, the gap between the rich and poor has increased to a great extent. As they say, poverty is the mother of all evils. The same thing happened in Brazil, and it has raised the violent crime rate in all the major cities of the country.

Social Issues

Brazil is also facing some social challenges like a lower healthcare system, inadequate housing, poor education system, and child labor. Prostitution, drug abuse, and the dreadful condition of children in the streets of slums are the order of the day. However, race and gender bias is an ordinary thing in the country.

Trends

The middle class is increasing in Brazil. The Brazilian people very modern and they love the latest fashion. They love to buy branded, luxury, and expensive products. However, Football is a very popular sport across the country, and it’s always a favorite team at the FIFA World Cup Events.

Technological factors affecting 

Social Media

Mobile, software, and web development are some of the growing tech industries in Sao Paulo, the largest city in Brazil. According to an estimate, Brazil is the world’s 5th highest user of internet and mobile phones. Approximately over 50% of the country’s population is using interest. In fact, Brazilian people are highly active on social media platforms.

ICT Growth

Brazil has the world’s leading information and communication technology (ICT) consumer market. The Brazilian people prefer using technology to communicate with one another. The government and many other tech multinational companies are investing their resources in the ICT industry. However, many people are still facing the issue of poor internet connectivity issue.

Legal Factors Affecting Brazil 

Regulations

Brazil’s legal system doesn’t require businesses to have an employment contract, but writing a contract and signing it is a common practice. Generally, the government promotes foreign investment in many fields. However, the country prohibits investments in areas like transport, private security, nuclear energy, financial institutions, and postal services.

Environmental factors affecting Brazil 

Environmental Issues

Brazil is facing environmental issues like oil spills, land degradation, water pollution, air pollution, illegal poaching, wildlife smuggling, and deforestation. The government has taken many initiatives to deal with environmental challenges.

Tourism

The Brazilian tourism industry attracts millions of tourists from across the world, and it contributes significantly to the country’s economy. Some of her main tourist sites are over 2000 beaches, 62 national parks, Iguacu Falls, rainforest, Amazon River, and hundreds of other beautiful sites.

Conclusion: Brazil Pestle Analysis Example Country

After an in-depth study of the pestle analysis of Brazil, we have concluded that Brazil is indeed the world’s largest and middle-income growing country. Increasing poverty, crime rate, unemployment rate, and environmental challenges are some of the main issues. Brazil should utilize its resources and capital to address these challenges; while paying heed to the external political, economical, social, technological, legal, and environmental factors impacting the country.