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Inflation and Unemployment : Poland vs Brazil

In: Business and Management

Submitted By nicole89
Words 1350
Pages 6
Introduction:

In this report the Economies of Poland and Brazil will be compared. The topics that will be covered are the following, Balance of Payments, Unemployment, Inflation and GDP. The research for this report has helped understand more about the economies of this world.

Inflation

Inflation is defined as the rate of the general level of prices for goods and services are rising, and, subsequently, purchasing power is falling (Investopedia, 2011). Comparing the two countries we were quite surprised about the outcome.

Brazil:

Between 1980 and 2010 the average inflation rate in Brazil was 445.98% (Trading Economics, 2011). This is an extremely high average inflation rate which displays a rather weak economy. The reason for this is the extremely high inflation rates between 1989 and 1994.

Below is a table displaying the inflations rates of Brazil from January 2008 to the current date.

As you can see there it is clearly shown when the economic crisis affected Brazil. The inflation rate in 2008 was 6.4% (Trading Economics, 2011). The high inflation rate was of course very convenient for government since; the Mint printed money around the clock, at a very low cost to the Treasury (v-brazil, 2011).

In 2009, the inflation yet again decreased to a less severe level. The economy was slowly but surely recovering from the major economic crisis that hit the world in 2008. The government accomplished this through the increase of interest rates, which prohibits people from investing money. The government wants to take money out of the circular flow.

In late 2010 the inflation rate yet again started to increase. The prices for goods such as food and beverages increased by 0.9%, and transport increased by 0.36%. Looking at the consumer price index between Brazil and Poland, Brazils is significantly higher. This is evidently due to the higher…...

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