Macroeconomics and Infrastructure: a Brazilian Overview

2

Quarterly GDP Growth Rate Against same Period in the Previous Year

After several quarters with increasingly negative GDP rates, Brazil started to

introduce some reaction from the first quarter of 2016. Currently, the growth

rates are positive.Source: IBGE

-8

-6

-4

-2

0

2

4

6

2013.I

2013.II

2013.III

2013.IV

2014.I

2014.II

2014.III

2014.IV

2015.I

2015.II

2015.III

2015.IV

2016.I

2016.II

2016.III

2016.IV

2017.I

2017.II

2017.III

2017.IV

-4,00%

-3,00%

-2,00%

-1,00%

0,00%

1,00%

2,00%

3,00%

4,00%

2013 2014 2015 2016 2017 2018* 2019*

3

Annual GDP Growth Rate + Focus Projection

The economic situation for 2018 and 2019 is far more positive.* Projections

Source: IBGE, BCB

4

Consumer Price Index (IPCA)

Source: IBGE, BCB

0,00

2,00

4,00

6,00

8,00

10,00

12,00

2013 2014 2015 2016 2017 2018* 2019*

After four years of high inflation, Brazil comes experiencing reduced rates. The projections for 2018 and 2019 are optimistic, demonstrating a solid process of price stability* Projections

After four years of high inflation, Brazil comes experiencing reduced rates.The projections to 2018 and 2019 are optimistic, demonstrating a solid process of price stability

5

150

200

250

300

350

400

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Brazil’s Foreign Exchange Reserves (US$ billions)

Source: BCB

Very strong reserve position and no problems regarding the balance ofpayments

6

Investment in Infrastructure in Brazil (% PIB)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Historically low rates and a brutal fall from 2015 onwards.

7

Public and Private Investment in Infrastructure in Brazil (% PIB)

Source: ABIDB

61,25% 60,50%66,67%

67,43%

0,00%

0,50%

1,00%

1,50%

2,00%

2,50%

3,00%

2013 2014 2015 2016

Public Investiments Private Investiments

Reduction of public and private investment, but increased private participation in infrastructure investment

8

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016

Banks Others* BNDES Transfer BNDES Direct Capital Market

Source of Financing

*Others refers mainly to: BID and BNB Source: Anbima

Historically Brazilian infrastructure depends on BNDES financing, but things are

changing: low interest rates, capital market Development and foreign financing.

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