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Economy of the state of São Paulo

This article is about the state. For the city, see Economy of the city of São Paulo.

The economy of the state of São Paulo is developed and holds the highest GDP among Brazilian states, producing, in 2020, around 2.326 trillion Reais (31.6% of GDP),[1] and the second largest GDP per capita (BRL 48,542.24 in 2018).[2] Being the richest state and population of Brazil, is its main financial center and one of the main centers in the world. The third largest economy and the third largest consumer market in Latin America, occupies the 21st position in the ranking of the largest economies on the planet, ahead of countries such as Argentina, Belgium, Chile and Singapore. Thanks to its enormous economic strength, São Paulo is known as "the locomotive of Brazil".[3]

Economy of São Paulo
Datasheet
Participation in the Brazilian GDP 31.9% (2018)
GDP 761 Billions $ (2024)
GDP per capita 33 393 $(2024)
Composition of GDP
Agricultural 2.0% (2009)
Industry 29.0% (2009)
Services 69.0% (2009)
Activities economic
Exports (US$38 billion): vehicles and parts (17.2%), planes, helicopters and aero parts (11.6% ), other agro-industrial products (soy, meats, coffee, paper – 10%), sugar and alcohol (7.8%), metalworking (7%), orange juice (5.2%), electronics and telecommunications (4.1%), miscellaneous (31.8%) (2005) .
Imports ($30.5 billion): oil and derivatives (8.4%), computer goods (7.8%), aero parts (4.9%), vehicles and parts (4.3%), metalworking (3%), medications (2.1%), miscellaneous (63.3%) (2005).
Electricity
Generation 56,756 GWh (2004)
Consumption 85,193 GWh (2004)
Telecommunications
Landline telephone 13.4 million lines (2006)
cell phones 22.7 million (2006)

The São Paulo economy, developed and heterogeneous, is fueled by abundant natural resources, a well-developed infrastructure, high productivity and a highly qualified workforce, with 70% of the qualified workforce in the country.[4] São Paulo is currently a leader in several sectors of the Brazilian economy, notably in the financial sector, concentrated in the city of São Paulo, which contains more than 30.5% of bank branches and 30% of credit operations in Brazil, in addition to BM&FBovespa, one of the five largest stock exchanges in the world. In agriculture, it stands out as one of the largest producers in the country, being the world's largest producer of orange juice, sugar and ethanol, and also ranks among the main industrial food producers in the world, holding about 35.5% of the national industrial food production. In industry, it stands out as the most modern and varied in Latin America, which has a strong technological base, having the largest industrial park and concentrating 36% of Brazilian production; the automobile industry stands out, being the birthplace of the automobile industry in Brazil, the 15th largest vehicle producer in the world, centralizing more than 41% of the factories of the national automotive complex; the aerospace industry and defense, which is the largest aerospace hub in Latin America. Other important sectors that are also in a leadership position in the country are research and development, health and life sciences, real estate market, energy, information and communication technology (ICT), oil and natural gas, green economy, among others.[5][6]

Located in the Southeast Region, the second smallest in the country in territorial extension, the State of São Paulo borders two of the three states of the Region, Minas Gerais and Rio de Janeiro, and with Paraná to the south and Mato Grosso do Sul to the west, in addition to the Atlantic Ocean to the southeast. The federative unit offers an excellent infrastructure logistics for investments, due to the good conditions and extension of its road network, as well as its infrastructure waterway, port and airport. The interconnection of these networks allows an efficient multimodal transport system. According to a survey carried out by the National Transport Confederation (CNT), 19 of the 20 best highways in Brazil are located in the state, thus being the best road network in the country, with 81.6% of its extension classified as excellent or good.[7] In addition, it has the largest and main port in Brazil – one of the main ones in the world – and the largest port complex in Latin America: the Porto de Santos; and the largest and second busiest airport in Latin America, the São Paulo-Guarulhos Airport. In 2018, the state exported around 52.3 billion dollars, which represented 21.8% of Brazilian exports. Among its largest consumer markets are Associação Latino-Americana de Integração (Aladi), to which it exported 30.23%; the North American Free Trade Agreement (NAFTA), 22.47%; Mercosur, 15.96%. With regard to countries, the United States stands out with 17.36% of exported products, followed by China, with 12.46%. With regard to imports, the two countries remain the main partners, but with the reverse order: the latter accounts for 18.72% of the value of imports from São Paulo, while the United States, 17.43%; Alemanha represents 9.41%.[8]

ICMS collection in São Paulo is the highest in the country. In 2012, it was R$ 109,103,539 thousand or 33.4% of the entire collection of Brazilian states. The state's gross revenue generated something like $550 billion at purchasing power parity.

Despite continuing to grow economically, the state of São Paulo has been losing part of its share in the national GDP, evidently due to the development of other states. In 1990 the state accounted for 37.3% of Brazil's gross domestic product. In 2008, participation in the total production of goods and services in the country was 33.1%.[9] In 2009, the share was 33.5%, falling again to 33.1% in 2010 and 32.1% in 2013 and rising to 32.2% in 2014.[10]

São Paulo is responsible for 28.6% of the Industrialized products manufactured in Brazil. The participation in the national industrial GDP has reduced since 2010, when it was responsible for 32.1% of the total. In relation to the state's GDP, industry accounts for 22.9%.[11] In 2016, it was the state with more billionaires, 71 of the 165 in Brazil.[12]

With COVID-19, the country's economy slowed down, while the state showed an increase above the national average, which fell 4.1%,[13]

Origins

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Arrival of the Portuguese in Brazil and the process of colonization

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Since about 12000 AEC, the territory of the current State of São Paulo was already inhabited by indigenous peoples. Its coastline was invaded by peoples from the linguistic trunk Tupi coming from Amazon around the year 1000. Thus, in the 16th century, when the process of colonization of the state of São Paulo with the arrival of Portuguese and Spanish navigators to the Brazilian territory, the majority indigenous people in the region were the tupinambás, tupiniquins, tamoios, carijós and others, on the coast; and peoples from the linguistic trunk macro-jê inland.[14][15]

Industries

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Industry is the main feature of São Paulo's economy. After the 1929 crisis, in New York City, coffee gave way to industries, which made São Paulo remain in the lead of the national industry until today. The state exceeds the industrial production of Rio de Janeiro, Minas Gerais and Rio Grande do Sul. Its main industrial centers are:

 
Embraer E-190, jet developed by company Embraer which is headquartered in São José dos Campos.

Agriculture

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Oranjal in the city of Avaré

The main characteristics of farming in São Paulo are variety and quality. In 2017, the income generated by the sector in São Paulo corresponded to 10.14% of the national agricultural activity, according to the Brazilian Institute of Geography and Statistics (IBGE) and the State Data Analysis System Foundation (Seade) – (2017)[19]

The two main agricultural highlights in the state are sugar cane and orange. In 2019, São Paulo produced 425,617,093 tons of sugarcane.[20] Production paulista is equivalent to 56.5% of Brazilian production of 752,895,389 tons, surpasses the production of India (2nd largest sugarcane producer in the world) in 2019 (which was 405,416,180 tons) and was equivalent to 21.85% of world production of cane in the same year (1,949,310,108 tons). As a result, it becomes a major producer and exporter of ethanol and sugar.[21][22][23][24] In 2019, São Paulo produced 13,256,246 tons of oranges.[25] São Paulo production is equivalent to 78% of Brazilian production of 17,073,593 tons, surpasses the production of China (2nd largest orange producer in the world) in 2019 (which was 10,435,719 tons) and was equivalent to 16.84% of world production of orange in the same year (78,699,604 tons). It is largely exported as juice.[21] It also stands out for producing 90% of the country's peanuts, which are partly exported;[26] 85% of lemon;[27] in addition to being the largest Brazilian banana producer,[28] tangerine[29] and persimmon,[30] the 2nd largest producer of potatoes, carrots and strawberries;[31][32][33][34][35] the 3rd largest for coffee[22] and cassava;[36] and has considerable soybean production[37] and corn.[38]

Livestock activity has a significant participation in São Paulo. Agribusiness production related to the segment added up to R$48 billion in 2017. The cattle breeding areas in São Paulo produced R$7.8 billion in cattle, that is, 10.33% of what is produced in Brazil. The egg sector, for example, participated with 23.35% of Brazilian production, in monetary terms this meant a production of BRL 3.4 billion.[39]

According to IEA data, the production value of chicken meat in the State of São Paulo in 2018 was R$3.7 billion, occupying fifth place in the ranking in the State Agricultural Production Value, behind sugarcane values, beef, orange for industry and soy, with a decrease of 4.6% compared to 2017. The production of chicken meat in 2018 was 1.34 million tons, a loss of 11.1% over 2017.[40]

Swine farming in São Paulo faces problems that are difficult to solve, such as lack of scale in production, high production costs, competition with other more profitable agricultural activities and lack of cooperative aptitude, to name just a few. Added to these problems is competition for consumers who, when they have budgetary restrictions on purchasing food, choose chicken meat based on the price and, when they don't have it, choose beef based on preference. What results from these factors is the growing disincentive for pig farmers to remain in the activity in which production is insufficient and practically all consumed in the state itself.[41]

Energy

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The state of São Paulo, being the most industrialized state in the federation, is the largest producer and consumer of national energy.[citation needed] São Paulo has more Hydroelectric Power Plants than any other state, also having a thermoelectric plant, also known to be the largest in Latin America.[citation needed]

History

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It can be considered that the economic history of São Paulo begins with the coffee cycle that started in the second half of the 19th century (during the period of the First Republic the state also had a relevant expansion industrial). This cycle lasted until the crash of the New York Stock Exchange in 1929. The decline of coffee farming causes the transfer of capital to industry, which was able to develop supported by the consumer market and the labor force available in the state. This first phase of industrialization takes place in the Brazilian economic context of import substitution.

The period of greatest growth of the industry in the state occurred during the mandate of Juscelino Kubitschek, who promoted the internationalization of the Brazilian economy, bringing to São Paulo (mainly the ABC) the industry automobile.

Finance

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The São Paulo Stock, Commodity and Futures Exchange, in September 2010, became the second largest stock exchange in the world, at market value.[42]

See also

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References

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Citations

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  1. ^ "Fifteen states have GDP above the national average in 2018; Sergipe is the only one with a drop". IBGE – 2021 Census (in Brazilian Portuguese). Retrieved 2021-03-26.
  2. ^ "System of Regional Accounts: Brazil 2018" (PDF). Brazilian Institute of Geography and Statistics (IBGE). Retrieved March 26, 2021.
  3. ^ "São Paulo is in the 21st place in the ranking of the largest economies in the world". Government of the State of São Paulo (in Brazilian Portuguese). 2020-11-09. Retrieved 2021-03-26.
  4. ^ sao-paulo-esta-se-descolando-do-restante-do-pais,70003479998 "'São Paulo is moving away from the rest of the country' – Economy". Estadão (in Brazilian Portuguese). Retrieved 2021-03-26. {{cite web}}: Check |url= value (help)
  5. ^ "Business sectors | InvesteSP". Investe SP (in Brazilian Portuguese). Retrieved 2021-03-27.
  6. ^ "Diversified economy | InvesteSP". Investe SP (in Brazilian Portuguese). Retrieved 2021-03-27.
  7. ^ "SP has 19 of the 20 best highways in Brazil, according to research". Governo do Estado de São Paulo (in Brazilian Portuguese). 2017-07-08. Retrieved 2021-03-26.
  8. ^ "International trade | InvesteSP". Investe SP (in Brazilian Portuguese). Retrieved 2021-03-27.
  9. ^ Folha de S. Paulo. "Southeast Region loses share in GDP, says IBGE". Retrieved February 14, 2010.
  10. ^ "Seade PIB". Brazilian Institute of Geography and Statistics (IBGE). Archived from the original on October 13, 2019. Retrieved October 14, 2019.
  11. ^ "industrial GDP 2010 – G1". Retrieved 8 September 2016.
  12. ^ Redação (2016-09-02). "The Brazilian states with the most billionaires". Forbes Brasil. Retrieved 2021-03-27.
  13. ^ "PIB of São Paulo grows and stands out amid the fall of the national and world economy". Governo do Estado de São Paulo (in Brazilian Portuguese). 2021-03-04. Retrieved 2021-03-26.
  14. ^ "History of São Paulo – 16th Century". www.sp-turismo.com. Retrieved 2021-03-27.
  15. ^ Bueno 2003, p. 19.
  16. ^ "O Brazilian Silicon Valley". TI Magazine. April 5, 2001. Archived from the original on 2012-09-13. Retrieved July 28, 2010.
  17. ^ [1][dead link‍]
  18. ^ "Automotive". InvesteSP. Retrieved October 14, 2019.
  19. ^ "Agropecuária | InvesteSP". Investe SP (in Brazilian Portuguese). Retrieved 2022-06-02.
  20. ^ Sugarcane 2019 Brazil Table 1612
  21. ^ a b Production of world agriculture in 2019, by FAO
  22. ^ a b IBGE predicts record grain harvest in 2020
  23. ^ "Coagro expects the best sugarcane harvest in the last four years". Archived from the original on 2020-07-02. Retrieved 2023-07-02.
  24. ^ MONITORING THE BRAZILIAN SUGARCANE CROP MAY 2019
  25. ^ "Brazilian orange production in 2019" (PDF). Embrapa. Retrieved February 18, 2021.
  26. ^ Study maps production areas of peanuts from Brazil to prevent coal disease
  27. ^ Brazilian lemon production in 2019
  28. ^ Brazilian banana production in 2019
  29. ^ Brazilian production of tangerine in 2019
  30. ^ Persimmon – National Production Panorama
  31. ^ "CARROT:Production, market and prices" (PDF). Archived from the original (PDF) on 2021-02-15. Retrieved 2023-07-02.
  32. ^ It's potato
  33. ^ Potato growers live different realities in Minas Gerais
  34. ^ Increased demand will raise the potato harvest in Minas
  35. ^ What is the outlook for strawberry production in Brazil?
  36. ^ pdf Brazilian cassava production in 2019
  37. ^ Check out how the soybean harvest is in each state of the country
  38. ^ Estimate of Corn Supply and Demand in the State of São Paulo in 2019
  39. ^ "Agribusiness | InvesteSP". Investe SP (in Brazilian Portuguese). Retrieved 2022-06-02.
  40. ^ "IEA". www.iea.sp.gov.br. Retrieved 2022-06-02.
  41. ^ "IEA". www.iea.agricultura.sp.gov.br. Retrieved 2022-06-02.
  42. ^ g1 (2010). "Bovespa becomes the 2nd largest in the world by market value". g1.globo.com. Retrieved September 29, 2010.{{cite web}}: CS1 maint: numeric names: authors list (link)

Bibliography

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