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Lula assumed control of a country in a fragile macroeconomic environment. The sharp devaluation of the currency (the real) resulted in uncontrolled inflation (which jumped from 7.7% in 2001 to 12.5% in 2002) and the rapid deterioration of the country's finances. Net public sector debt rose from 52% to 60% of GDP in just one year (2001 to 2002). In addition to the economic mismanagement of the Cardoso government, steeped in the eternal fear of the market, Lula was elected president. Ironically, the election of Lula put Brazil on track.
Between 2003 and 2005, Lula cleaned house. He fulfilled the commitments to stability made during the campaign in an historic Letter to Brazilians, reducing inflation and public sector debt. Between 2006 and 2008 he turned to a strong development policy, focusing on accelerating growth and increasing employment and investment. Between 2009 and 2010, Lula adopted a series of measures to combat the impacts of the international crisis that began in late 2008: more public investment, expansion of credit to companies and individuals, reduction of taxes on various sectors and products, and sustaining internal market consumption. Policies that were continued by Dilma and help explain the success of Brazil’s macro and microeconomic policies. Llarge companaies benefited but so did micro and small enterprises. The upper classes won but mainly the gains were made but C class and the poor.