Life's A Beach.(Business)

Byline: Mac Margolis

The real is flying high -- and so are Brazilians.

For the makers of Porsche, times have never been better in Latin America's biggest nation. Sales to Brazil have risen tenfold since 2003 and are set to hit a record 500 cars this year -- not bad at $144,000 to $269,000 a pop. Of course, they seem a lot cheaper to Brazilians these days. With the real up 22 percent against the dollar in the last year, a car that fetched 800,000 reals in 2003 now retails for about 480,000. No wonder Brazil's luxury-goods market will soon top $4.3 billion, an impressive 33 percent rise in the last five years, according to the Sao Paulo research firm GfK Indicator.

A new taste for expensive toys is only half the story. For four years running, the Brazilian real has outperformed the world's 16 most traded currencies. After nearly two decades of slumber, the world's ninth largest economy is regaining its place as an emerging-market favorite. Growth will hit 5 percent this year, up from 3.7. The boom in raw-materials prices has helped, as has export diversification away from the United States. Inflation, once a national curse, is down to 4.5 percent and the Treasury will post a budget surplus for the ninth straight year. Despite the spiking real, exports are surging in value and volume. Foreign direct investment is at a 60-year high. Much of the bounty is pouring into the Sao Paulo Stock Exchange, up 39 percent by volume this year alone. Once the world's biggest debtor, Brazil is now a net creditor, with $160 billion in foreign reserves.

Brazilians have seen spurts of development before, but not like this. "Other countries may be growing faster, saving more or seeing higher investment rates," says Ricardo Amorim, emerging-markets strategist for WestLB Bank. "It's the combination of positive factors that sets Brazil apart." That combination is likely to win Brazil an investment-grade rating next year, which will drastically reduce company borrowing costs -- and push the mighty real up yet another peg against the greenback.

And just because God is ...