Written by Antoine Robbesom
Brazil Appears to Have Left Behind the Economic Crisis
Positive news about the Brazilian economy is being publised almost every day.
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Encouraging
While Netherlands is struggling with the effects of the economic crisis and partly as a consequence now to the state pension age is increasing, the Brazilian generated and received encouraging news on the economic situation of his country. It also seems the biggest South American country to gain more prestige and influence in the world order. Brazil was chosen as a temporary member of the UN Security Council for a period of one years. It is also no secret that the country is dreaming aloud of a permanent seat on the Council. Recently it was determined that the G20 (which includes Brazil) the economic power of the G8 takes over. Gradually, the South American giant awake, after decades as a powerful nation in the making to be considered.
President Lula and his future sucessors are now allowed to join the world's most powerful polical leaders.
Not Taken Seriously
Like many Western countries, Brazil also received strong blows to process due to the global crisis. Between November 2008 and January 2009 there were nearly 800 thousand jobs lost, fell into domestic consumption, and the country was officially in an economic crisis. This crisis is already past, as in the second quarter of this year growth was achieved. It is expected that even this year economic growth will be achieved. A result where previously no one had seriously taken into account, except the Brazilian Minister of Economic Affairs. But his statements were seen as utopian, he was thus not taken seriously. For next year, even a full restoration of economic growth is expected, possibly about four percent.
The BOVESPA Index (Oct 2007 - Oct 2009)
Stocks and Currency
The fair in São Paulo, the Bovespa, was in the global stock market crisis swept and lost heavily. For some months there remedial occurred last week and was the highest position since July 2008 reached a position well before the crisis. This week the stock rose over four percent, this month is the increase more than eight percent, since early this year, an increase of 77 percent achieved. According to specialists, it is mainly foreign investors active in the Brazilian stock market. The dollar, which rose sharply during the crisis (2.40 reais) against the Brazilian real, almost back to the levels before the crisis, and stands at about 1.70 reais. The same applies to the euro at the time of the crisis was worth more than 3 reais, and now is about 2.50 reais counted down to one euro.
The dollar versus the Real (Oct 2007- Oct 2009)
Unemployment
Many Brazilians received in December 2008 the most horrible Christmas gift they could imagine: dismissal. Normally at the end of the calendar year many workers redundant, but in 2008 the number was significantly higher. In total, nearly 800 thousand redundancies between November 2008 and January 2009, especially in industry, construction and retail. The loss of jobs is now completely eliminated in September were 252 thousand more jobs created than deleted in the first nine months of 2009 were more than 932 thousand jobs created, as January is ignored, have since February this year net more than one million jobs come there. It is striking that in September the industry (which was the biggest blows to process) was the largest employer with more than 123 thousand jobs.
Employment (registered jobs) Oct 2008 - Oct 2009
'Dutch Disease'
The positive news is collected outside the country. The creator of the term BRIC (Brazil, Russia, India, China, the emerging economic powers), Jim O'Neill, expects Brazil in the coming years will grant an annual growth of about five percent. A double-digit growth, as in China, will not be achieved. The economist is this due to the relatively small internal market, compared with China and India, the low share of investment in national income, and that the Brazilian market is not completely open to the world. But the economist praised the policies of Lula, mainly because of the substantial investments including infrastructure. The recent discoveries of large oil fields could give an additional impetus to the country, but Brazil must also prevent "infected" with the "Holland disease", an economic term (historically, an incorrect estimation), for the appreciation of national currency and caused a growing competitive and difficult economic outlook.
The BRIC countries, future economic superpowers
World Cup and Olympics
The allocations of the 2014 World Cup and the Olympic Games in Rio de Janeiro in 2016 will certainly give an extra boost to the Brazilian economy. There is already talk of tension in the Brazilian cement market, now in the coming years is largely built and is working on the infrastructure. Due attention from around the world, tourism will probably be given a substantial boost. The twelve World Cup cities itself often a tourist attraction (Rio de Janeiro, Recife, Salvador) or near tourist attractions (Belo Horizonte with the historic cities of Ouro Preto Pantanal and in Cuiabá) will take to prepare for greater flows of foreign tourists .
Brazil will be the sportive spot for two times
Interest and Inflation
Serious drawback is the still high Brazilian interest to pay for the loans. Even though this rate to fall sharply (the lowest position since 1995), there is still an average of seven percent per month are paid, calculated that around sixty percent per year. The customers seem a high price to pay for the banking system, recently by the World Economic Forum the meset efficient in the world was proclaimed. Inflation is almost stable, it showed a slight decline in recent months. Inflation is just over four percent annually.
Inflation in Brazil (Jan 2008-Jun 2009) blue line: inflation on manthly basis. green line 12-month inflation. red line: accumulation in a calendar year.
Flying
Brazilians seem to want to fly again. The Brazilian airlines (TAM, GOL / Varig, WebJet and Linha Azul) in September recorded an increase of thirty percent compared with September 2008. Capacity utilization rose five percent to over 65 percent. The Brazilian aircraft manufacturer Embraer is however in heavy weather. The number of aircraft sold is halved and over four thousand workers were driven from office in February.
Tax Cuts
Moreover, tax exemptions for the purchase of cars (to September 30), white goods (until October 31) and trucks (December 31) completed. The Ministry of Finance considers these incentives do not need ice. It is estimated that these measures the Treasury 559 million Brazilian reais (220 million euros) cost.
Many Brazilians will celebrate Reveillon on the beach
Optimism
The Brazilians seem optimistic. Sales before "Dia das Crianças" (Children) increased by over two percent from 2008. And recently it was reported that many Brazilians have already booked their end of year. The new year celebration in 2010 will therefore be launched with confidence and be seen.