The New Economic Powerhouse

financial chart, Brazilian money and pen

Today, Brazil is one of the best and safest countries to invest in. It has been one of the fastest growing economies in the world over the last ten years, and all the reliable economic authorities expect that to continue.

The Economy Today - What's different about Brazil?

  • Deep international reserves:  Brazil has built enough international reserves to continue sustained growth. The diversity of resources and its enormous internal market has enabled self sufficiency.
  • Investment grade status: In 2010 Moody’s cited Brazil’s “strong economic and financial resilience” during the worldwide slowdown. Brazil has an AA credit rating by all of the main agencies: Moody’s, Standard & Poor’s and Fitch Ratings.
  • Economic powerhouse: . Currently, Brazil is the world’s 6th largest economy with US$1.3b GDP - half of the total of Latin America.  Economic growth has been consistent at 5% per annum, and has been for nearly 10 years.
  • Sustainable growth: With its 4.7% GDP estimated growth per annum and an average of 4.6% inflation – well within the Central Bank's target rate - Brazil is heading for long term sustainable growth.
  • Wealthier middle class: The middle class is growing and becoming wealthier. 55m people entered the middle class during the last 3 years and 85 million people out of 195m are now in Brazil's middle class.
  • Banking reforms: In an article in the FT on November 6, 2011, Itau Unibanco, Latin America’s largest lender by market capitalisation, said net profit was 25.5% higher than last year. In 2002,  total credit to the private sector amounted to 26% of GDP; today it is 47.3%.
  • Government Commitment: The country’s government under President Dilma Rousseff has made economic growth and poverty alleviation top priorities.
  • Housing deficit: There is currently a housing deficit of between 7 and 8 million homes, but since 2007, domestic mortgages have been available for first time in 25 years.
  • Government schemes: These are bolstering the country's economy whilst alleviating income inequality.  The 'Bolsa Família' is a program of cash transfer to the poor and the 'Minha Casa, Minha Vida' ('My House, My Life') housing initiative provides grants and financing to alleviate the country's low income housing deficit.
  • Upcoming sporting events: Brazil will get another boost when it hosts the 2014 FIFA World Cup, which has already provided a huge infusion of infrastructure spending, and the Olympics will take over Rio de Janeiro two years later.

 

Read our article:  Companies Investing in Brazil

 

Invest in Brazil's growth story and earn returns of over 20%p.a.