In the records of the International Monetary Fund, World Bank, and CIA World Factbook, Canada places 9th while Brazil is at 10th ranking among the largest economies of the world. While Brazil has a GDP of $1.849 trillion and Canada has a GDP of $1.271 trillion, Brazil’s GNP is $715 billion as compared to Canada’s GNP of $760 billion. Apparently, Canada is currently wealthier than Brazil. Gross National Product (GNP) is the total income that residents earn within a calendar year.

There are, however, quite obvious reasons why Brazil can overtake Canada. Brazil has a higher labor force potential, and therefore a higher potential output towards higher GDP. Brazil has a higher birth rate at nearly 19 births/1,000 population, while Canada has a little more than 10 births/1,000 population. In terms of death rate, Brazil has a lower death rate at 6 deaths/1,000 population, while Canada has nearly 8 deaths/1,000 population.

Brazil has smaller public debt (45.1 percent of GDP) than Canada’s public debt (64.2 percent of GDP). Brazil has lower external debt ($229.4 billion) than Canada’s external debt ($758.6 billion). Brazil, therefore, has lower debt servicing to cover. Canada will remain to be more handicapped in paying off the interests on its debts.

The US is Canada’s major export partner, at 79.3 percent of the country’s total export volume. Comparatively, Brazil only trades with the US at 14.1 percent of its total export volume. In terms of export demand from the US, Brazil is less affected by the US economic meltdown.

Growth in Canada’s economy will slow down by to 0.6 percent this year, the least since 1991, according to the Bank of Canada in an Oct. 23, 2008 forecast. The country is suffering from weak demand in the U.S., and slumping prices for commodities, which generate about half the country’s export revenue. On the other hand, Brazil is not too dependent on the US for its export trade. It is also not as affected with the US economic meltdown because most of Brazil’s investments are internal.

Brazil will also produce enriched uranium to augment its energy needs. This can jumpstart Brazil’s technology potential as this will be more cost-effective for the country to run its industries.

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Via People’s Daily Online