This month, the World Trade Center São Paulo hosted the 42nd World Trade Center Association General Assembly, and what a fitting location. Over the last decade, Brazil's impressive resources, sophisticated corporations and sound macroeconomic policies have led to some remarkable achievements.

In a 2003 report published by Goldman Sachs, a global financial management firm, the Brazilian economy was projected to overtake Italy's by 2025. But due to greater than anticipated growth, United Nations data indicate Brazil's economy surpassed Italy's last year, with a gross domestic product exceeding $2 trillion. As a result, Brazil now possesses the world's seventh largest economy, ranking after France and the United Kingdom.

Many factors have contributed to Brazil's strengths and ability to manage global economic shocks. According to Jim O'Neill, Chairman of Goldman Sachs Asset Management, the impressive structural break experienced by Brazil in the latter part of the last decade enabled the country to deal with the global credit crisis in a manner almost unthinkable just a short time ago.

Due to its international appeal, Brazil attracted nearly $48.5 billion in foreign direct investment last year, an increase of nearly 90 percent over the previous year. This represented more than 30 percent of all foreign direct investment inflows into Latin American and the Caribbean, and more than twice as much as Canada received, according to United Nations statistics.

But that's not all. Brazil gross domestic product growth rate reached 7.5 percent in 2010, slightly higher than the average of emerging markets and significantly higher than advanced economies, the International Monetary Fund reports. But like many current trends, Brazil's growth rate is anticipated to decline to 3.8 percent this year and 3.6 percent in 2012. O'Neill says for Brazil to enjoy another decade similar to the last one, it needs to reduce government spending and the value of the real, among other things.

"Despite some of the recent political challenges to confront the new Rousseff government, our risk ratings for Brazil's economic and financial health are among some of the lowest in Latin America, boosted by solid growth prospects over the medium-term and healthy foreign exchange reserves," says Christopher McKee, CEO, The PRS Group Inc., a quantitative-focused political and country risk forecasting agency in Syracuse, NY. Although several short-term issues are problematic, including newly implemented protectionist policies, Brazil has a very bright future.

United Nations data indicate that from 2000 to 2010, Brazilian imports, at $191.5 billion last year, increased at a rate almost twice as fast as total world imports. And although Brazil's demand may slow in the short term, new opportunities will emerge as it hosts the World Cup and Olympics in the coming years. Trade and investment opportunities in tourism-related infrastructure, as well as in competitive-enhancing infrastructure, likely will emerge. Plus, Brazilian growth sectors, such as aerospace and aviation, information technologies, telecommunications, energy, and mining will present even more opportunities.

As the world's fifth most populous country with 200 million people, Brazil's middle class is expected to continue expanding. And its labor force, which is projected to rise from 105 million to 117 million by 2020, according to the United Nations estimates, likely will become a generator of wealth as it achieves higher levels of productivity.

This article appeared on the World Trade Centers Association website, October 2011.
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John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the ManzellaReport.com, is a world-recognized speaker, author of several books, and a nationally syndicated columnist on global business, emerging risks and economic trends. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.




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