The year 1973 marked a new phase in Brazil’s development, a phase in which the country had to face severe internal and external challenges to the continuance of its growth. On the internal front, the economy showed signs of the exhaustion of the boom begun in 1967, as industrial output reached full capacity, inflation began to rise and the demand for capital goods soared. On the external front, the fourfold increase in international oil prices caused a significant balance of payments problem, in an economy where 80 per cent of the oil needs were imported.