brazilian trade and investment promotion agency apex-brasil brazil economic scenario and investment...
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Brazilian Trade and Investment Promotion Agency
Apex-Brasil
Brazil Economic Scenario and
Investment Opportunities
Alessandro TeixeiraPresident
Regions FDI Share of FDI inflows in selected regions
Latin America’s FDI inflows: Brazilian share
FDI in World
World Trade Trends
World Trade Flow – acceleration from 2002 onwards
World Trade Trends
World Exports
1999 2007
World Trade Trends
World Exports – BRICs Growth
1999 2007
World Trade Trends
World Imports
1999 2007
World Trade Trends
World Imports – BRICs Growth
1999 2007
Brazilian new cycle of economic growth
High rates of economic growth:– GDP– Consumption– Investment
Balanced growth;
Based on foreign trade and mass consumption;
Reduction of social and regional inequalities;
Sustainable Growth
Sustainable growth
Low external vulnerability:
New foreign policy – diversifying trade partners
Trade surplus (US$ 25 billion – 2008)
Current transactions surplus (US$ 3.6 billion - 2007)
International reserves (US$ 190 billion - 2007)
The country became a net foreign creditor (January 2008)
Trade flow
Source: MDIC
US$ 198 bi
US$ 173 bi
US$ 25 bi
Mass consumption – A new middle class appears Growth of the population’s consumption capacity
Expansion of employment and incomeIncrease on minimum wageCredit revolutionNew social programsInflation under control
Income Class
2002: C = 32% 2007: C = 49%
Source: DATAFOLHA
Employment Rate In Brazil, from 2004 to 2007, 1.41 million new
jobs were created each year on average
Family income
+10.1%+8.8%
+7.9%
* forecast
R$ billion
Source: IBGE
Family consumptionQuarterly growth over the past year’s same quarter
13.6%
Sales in commerce In 2007: 9.68% growth over 2006
Apr 2008: 10.26% growth – 12 month accumulated
Source: IBGE
Brazil – International ReservesUS$ billion
206,4
59,8
30
50
70
90
110
130
150
170
190
210
230
nov05
fev06
mai06
ago06
nov06
fev07
mai07
ago07
nov07
fev08
mai08
ago08
nov08
Fluctuation between mar/06 and nov/08: 146,6 billions
Pay off IMF debts
Mar/06
Nov/08 *
Source: Brazilian Central Bank
* Forecast
GDP growth in Brazil
2,7
1,1
5,75,0
4,0
5,05,4
3,2
4,0
-
1
2
3
4
5
6
7
2002 2003 2004 2005 2006 2007 2008 2009 2010
PAC GDP Growth Forecast 2008-10
PAC
Sources: IBGE, MF/SPE
* Forecast
GDP growth in Brazil
GDP growth – first semester, 2008/2007: 6.0%
Brazil - FDI inflowsUS$ billion
2007: inflows = US$ 34.3 billion
99% growth over 2006
Source: Unctad
Brazil and the international crisis
Brazil is now much less vulnerable to external crisis in comparison to the past years:
Soundness of external accounts;Fiscal balance and public debt reduction Inflation under controlGrowth sustained by domestic demand
Even though Brazil is not immune to crisis, impacts are limited.
Foreign confidence in Brazil This year, Standart & Poor’s raised its rating on
Brazil to Investment grade.
“Lowering inflation, a stable political situation and a raft of interesting mid and small- cap companies is driving increased investor interest in Brazil - making it one of the more attractive emerging markets for 2008.”
“There has been a lot of money flowing into Brazil in recent years and an increased demand for stocks. In terms of the growth and opportunities available, Brazil is an interesting country for investment.”
Financial Times – Feb 26, 2008
USA-Brazil TradeUSA is Brazil’s main trade partner:
– 14 % of Brazilian exports went to USA in 2008– 14,9 % of Brazilian imports came from USA in
2008
USA-Brazil Trade Flow
Investment Opportunities
Aeronautics
Biotechnology
ICT
Infra-structure (“PAC” and PPP)
Tourism and Real State
Biofuels
Oil and Gas
Main Sectors:
PAC – Growth Acceleration ProgramLarge investments being made in infrastructure:
Highways Energy Transportation
Raise productivity
Boost economic expansion and job creation
Stimulate private investment
Housing Urbanization and sanitation Oil & Gas
PAC – Growth Acceleration Program Facts and figures
US$249 billion of investments from 2007 to 2010
Target annual GDP growth: 5%
Brazil is the world largest biofuels producer;
In 2007, Brazilian ethanol internal consumption reached 16.7 billion litters, and ethanol exports totalized 3.4 billion litters;
Brazil represents 33.2% of ethanol global production, and 37% of global exports;
In Brazil, biofuels have already reached competitiveness with fossil fuel/petroleum;
In 2007, “flexfuel” vehicles sales rose 40% over 2006, and represented 86% of total sales of automobiles this year.
Biofuels – Brazil as a key player
High growth of energy demand Opportunity for biofuels
Apex-Brasil promotes
investment attraction to Brazil,
specially major capital inflows,
contributing to Brazilian
competitiveness and exports.
Apex-Brasil – Investment Promotion
Main ActivitiesOrganization of missions to potential investors
Participation in fairs and events in Brazil and abroad
Promotion of workshops and seminars
Visits to companies and distribution chains
Coordination of Business Rounds
Participation in Entrepreneurial Missions
One-stop Shop
