Brazil is one of the biggest beneficiaries of the commodities boom and the huge demand for resources from Asia. Thirst for the world's commodities from China and other fast-growing emerging markets has led to soaring exports of Brazil's natural riches – including iron ore, ethanol and soya – and has helped to swell the country's trade balance. The impact of rising commodity prices on Brazil's economy is startling: replace 2011 prices with those from 2005, and the country's $23bn trade surplus would swing to a $20bn deficit.
With its commodity economy booming, the Brazilian real has become one of the most overvalued currencies in the world, and imports have boomed to serve an increasingly wealthy population. The darker side of this boom is the growing threat to the country's manufacturers; these are feeling the pressure of cheap Chinese goods and have appealed to the government for support for domestic businesses.
