Brazil

It is not without reason that Brazil is known as the Giant of Latin America. With a strong, growing economy, Brazil offers many opportunities. But what does this exactly entail?

Characterized by large and well-developed agricultural, mining, manufacturing and service sectors, Brazil’s economy outweighs that of all other South American countries. The country is currently already the eight largest economy in the world. Together with Russia, India and China, Brazil constitutes the BRIC economies; countries with a rapidly growing economy which around 2050 will be among the richest countries in the world.

Economic growth

Since 2003, Brazil has steadily improved itsmacroeconomic stability, building up foreignreserves and reducing its debt profile. In 2008, Brazil became a net external creditor and two ratings agencies awarded investment gradestatus to  its debt. After record growth in 2007 and 2008, the onset of the global financial crisis hit Brazil in 2009. However, Brazil was one of the first emerging markets to begin a recovery.Consumer and investor confidence revived and GDP growth returned to positive (7.6%) in 2010, boosted by an export recovery. GDP is now expanding 50% above world growth and 100% above OECD growth. Brazil’s strong growth and high interest rates make it an attractive destination for foreign investors.

Expanding middle class

With its 200 million inhabitants and growing population, Brazil represents an enormous consumer market. In addition, the country has undergone a social transformation with declining unemployment rates and an increase in minimum wages. Extreme poverty fell from 25.6% in 1990 to 4.8% in 2008, and it even kept falling during the recent financial crisis. The expanding middle class and an increased minimum wage have led to increased consumer spending. Altogether, this enormous consumer market offers many opportunities for companies to expand their businesses in.

Export

Brazil harbours diverse raw materials and its abundant commodities give it an important place in world trade. The country has arisen as a major exporter of iron ore, meat, sugar, orange juice, soy beans, coffee and ethanol. Brazilian exports grew 32% in the first 2011 semester; at present pace, Brazil’s share in world’s exports will reach 1,4%. At the same time, Brazil has a very high index of diversification of exports, both in terms of items exported and markets.

Brazil and the Netherlands

The Netherlands already have a significant trading relationship with Brazil, being their number three export destination as well as the second largest investor in the country. Tremendous opportunities still exist for Dutch companies in sectors such as logistics, agriculture, water purification and renewable energy.

Investment climate

Brazil’s investments are rising. Hosting the FIFA World Cup in 2014 as well as the Olympic Games in 2016, the Brazilian government has set up the Growth Acceleration Program: Investments of R$ 503,9 billion on transportation, energy, sanitation, housing and water resources, planned between 2011 and 2014. With this program, the government aims to accelerate economic growth, increase employment and income, reduce social and regional inequalities and improve macroeconomic fundamentals. This program brings several advantages for foreign investors, such as a developed infrastructure, reduced interest rates, an improved tax system and a generally enhanced investment environment. Looking at the upcoming events together with the attractive climate for foreign investment, the time is now right to invest in Brazil.