Brazilian Achievements 2010 Your Best Choice for Business and Investment
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BRAZILA BRAND OF EXCELLENCE BRAZILIAN ACHIEVEMENTS 2010 YOUR BEST CHOICE FOR BUSINESS AND INVESTMENT PAC 1: A Long Cycle of Expansion Growth in Industrial Output Floating Exchange Rate and International Reserves Annual GDP growth Data in % annual change International reserves allow secure exchange rate fluctuation PAC 1 PAC 2 8 250 US$ billions Mar 03 - 241.7 6 6 Ago 08 - 205.1 Average 200 5 5.5% 4 4 2 150 Average 3 4.2% 0 100 2 - 2 50 1 - 4 Average 1.7% 0 0 - 6 Jan Jan Jan Jan Jan Jan Jan Jan Jan 1998 2000 2002 2004 2006 2008 2010* 2012* 2014* 1995 1997 1999 2001 2003 2005 2007 2009*10* 02 03 04 05 06 07 08 09 10 *Government forecast Source: IBGE *Forecast Source: FGV Source: Central Bank of Brazil Investment Has Strong Growth Path Job Creation Inflation Targeting Forecast of investment ratio 2009-2012 (% of GDP) Net Creation of Jobs Six consecutive years of inflation on target 22.0 10 MILLION JOBS IN THE FORMAL ECONOMY 8 1600 Market 21.0 7 forecast Forecast 20.0 1200 6 2010 4.91% 19.0 800 5 4 18.0 400 3 17.0 0 2 16.0 -400 1 15.0 0 1 2006 2007 2008 2009 2010 2011 2012 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10* Jan/04 Jan/05 Jan/06 Jan/07 Jan/08 Jan/09 Jan/10 Jan/11 Source: APE/BNDES *Government forecast Source: MTE/CAGED Source: Central Bank of Brazil Brazil is awash with optimism, thanks to a booming economy, huge new oil fields, the 2014 World Cup and the 2016 Olympic Games Achievements.indd 1 4/17/10 1:22 AM BRAZIL Contents APRIL / MAY / 2010 DIRECTOR AND EDITOR Dirceu Brisola ENGLISH EDITOR Brian Nicholson ASSISTANT EDITOR Luiz Gonzaga S. Neto CONTRIBUTORS Fernando David, Gilberto Costa, Luiz Gonzaga S. Neto, Roberto Amado COVER PHOTOS Sub-salt petroleum: Agência Brasil, Agência Petrobras, Vast oil fields lie Banco do Brasil, Centro Cultural more than 7,000m Banco do Brasil - Rio de Janeiro, beneath the ocean Ricardo Stuckert/PR, Unica, VC surface. (Illustration GRAPHIC DESIGN from Agência Assaoka.D Comunicação Petrobras) GRAPHIC PRODUCTION Solange Melendez PRINTED AT Rio de Janeiro celebrates: the city will host the World Cup and the Olympic Games Ipsis Gráfica COVER BRAZIL 3 MINISTRY OF EXTERNAL NOW Accelerated Economic Growth and a New Level of RELATIONS Editora Brazil Now Ltda. World Business is Boosting Optimism About Brazil Av. Prof. Alfonso Bovero, 323 The Brazilian economy is likely to grow between 6% and 7% in 2010: domestic TRADE AND INVESTMENT 01254-000 São Paulo SP Brazil consumption is breaking records, with rising employment and income. PROMOTION DEPARTMENT Phone: 55 11 3672 4323 Fax: 55 11 3875 7100 Anexo Administrativo I - Sala 534 FUTURE 1 http://www.brazilnow.com 11 Palácio Itamaraty Brazilian Companies Recover; Resume Major Esplanada dos Ministérios - Bloco H Distribution Investments at Home and Abroad 70170-900 Brasília - DF Brazil - a Brand of Excellence is Brazilian private industry is once again investing in acquisitions and in expansion of Phones: 55-61-3411-8793/ distributed worldwide by the productive capacity. 8794/8798 Brazilian Ministry of External Fax: 55-61-3411-8790/6735 E-mail: [email protected] Relations, via its embassies, SPECIAL REPORT 15 [email protected] consulates and other offices. A BANK AS BIG AS BRAZIL Website: www.braziltradenet.gov.br Distribution within Brazil is the Banco do Brasil regained the top spot among Brazilian banks in 2009, earning the highest responsibility of the publisher, profit ever recorded by any of the country’s banks. Editora Brazil Now Ltda. Trade Programmes Division Phones: 55-61-3411-8989 FUTURE 2 Fax: 55-61-3411-8967 TO ADVERTISE PLEASE 27 CONTACT Major Sporting Events Spell Big Business E-mail: [email protected] Editora Brazil Now Ltda. The 2014 World Cup and 2016 Olympic Games are Attracting Substantial Investments in [email protected] Transportation and Other Infrastructure, Tourism and Civil Construction. Trade Information Division http://www.brazilnow.com Phones: 55-61-3411-8932 Fax: 55-61-3411-8954 FUTURE 3 29 E-mail: [email protected] RESPONSIBLE DIRECTOR Performance During Global Credit Crunch Shows Dirceu Brisola (MT 8.961) Strength of Brazilian Banks Trade Promotion Operations The success of the Brazilian banking and financial system during the international credit Division With the support of the crunch became a world reference. Phones: 55-61-3411-8529/8531 MINISTRY OF EXTERNAL Fax: 55-61-3411-6007 RELATIONS 33 FUTURE 4 E-mail: [email protected] Brazil Accelerates Production in Sub-Salt Petroleum A major new oil field makes Brazil one of the biggest centers for offshore investments in the Trade Fairs and Tourism Division Phones: 55-61-3411-8960 world. Projects totaling US$115 billion through 2020. Fax: 55-61-3411-8957 E-mail: [email protected] 36 PAC Infrastructure Expansion Spurring Economic Growth Brazil’s Faster Growth Program, called “Programa de Aceleração do Crescimento - PAC”, involves megaprojects in energy, land transportation and in urban and social infrastructure. 2 Achievements.indd 2 4/17/10 3:08 PM Cover ACCELERATED ECONOMIC GROWTH AND A NEW LEVEL OF WORLD BUSINESS IS BOOSTING OPTIMISM ABOUT BRAZIL The Brazilian economy is likely to grow between 6% and 7% in 2010: domestic consumption is breaking records, with rising employment and income. New business is being driven by investment in infrastructure, massive oil discoveries in the offshore sub-salt fields and the staging of the 2014 World Cup and the Olympics in 2016. BY DIRCEU BRISOLA / LUIZ GONZAGA S. NETO These up-beat expectations are of 10%, as does investment which in The Brazil of the present is look- rooted in economic reality: according the final months of 2009 increased ing to the future with immense opti- to average market forecasts, Brazil’s 6.6%, three times more than con- mism. A climate of confidence reigns GDP should rise between 6% and sumption in the period. not only among Brazilians, but also 7% in 2010, underpinned by fam- Mathematically, even if the Brazil- among foreigners who do business in ily consumption, which in the third ian economy doesn’t expand at all in Brazil, or now seek to do so. It’s not quarter of 2009 rose 2.7% against the 12 months of 2010, the GDP for unusual for the foreigners to be even the previous quarter. This points to this year would show positive growth more optimistic. an explosive annualized growth rate of 2.7%, compared with 2009, Floating Exchange Rate and International Reserves Net Public Debt International reserves allow secure exchange rate fluctuation 65 % of GDP 250 US$ billions Mar 03 - 241.7 Market forecast 60 Ago 08 - 205.1 200 55 150 50 45 100 40 50 35 0 30 Jan Jan Jan Jan Jan Jan Jan Jan Jan Dec Dec Dec Dec Dec Dec Aug Dec Dec Dec Dec Dec DEC 02 03 04 05 06 07 08 09 10 02 03 04 05 06 07 08 08 09 10 11 12 13 Source: Central Bank of Brazil Source: Central Bank of Brazil 3 Achievements.indd 3 4/17/10 3:08 PM More than half of the 2009/10 Brazilian sugarcane harvest – 57.4% - will go to ethanol production, likely to reach 27.4 billion liters this year. thanks to a carry-over effect from the Foreign Direct Investment Brazilian Ethanol Production last months of 2009. Strong foreign demand for Brazilian assets (billions of liters) Projections by senior Brazilian and ensures resources to sustain growth 30 (US$ billions) international analysts already assume 50 the possibility of growth in Brazilian Central Bank’s forecast 25 economic activity being as high as 40 20 7% in 2010. One such optimist is Jim O’Neill, chief economist at investment 30 15 bank Goldman Sachs and creator of the acronym BRICs (for Brazil, Rus- 20 10 sia, India and China). At the end of March, in an interview with Spain’s El 10 5 Mundo, O’Neill said that “Brazil will have a spectacular decade ahead and 0 0 2002 2004 2006 2008 2010 2000/01 2004/05 2005/06 2008/09 may be the new country of fortune”. Source: Central Bank of Brazil Source: Unica O’Neill added that the 7% projection was his personal estimate, while that Happily, however, the crisis found cient alternatives to the world reces- of his bank was 6.4%. Brazil with healthy economic funda- sion. Thanks to this, Brazil emerged The outlook for Brazil has become mentals and public and private insti- from the economic turbulence stron- even more encouraging when one tutions ready and able to implement ger than it was before, and today the remembers the gloomy forecasts anti-cyclical policies directed at main- country is heading for annual average that reigned just 18 months ago, as taining investment and expansion of GDP expansion of at least 5.5% dur- the specter of a terrible depression consumption of the country’s grow- ing the next five years. threatened the world economy. ing domestic market, creating effi- This growth, driven by domestic 4 Achievements.indd 4 4/17/10 1:22 AM Inflation Targeting Reduction of the Public Deficit Six consecutive years of inflation on target Fiscal result of the public sector, as a % of GDP 4 8 Market 3 7 forecast Primary 2 6 2010 4.91% 1 5 0 4 - 1 3 - 2 - 3 2 Nominal 1 - 4 0 - 5 Jan/04 Jan/05 Jan/06 Jan/07 Jan/08 Jan/09 Jan/10 Jan/11 2002 03 04 05 06 07 08 09 10* 11* 12* 13* 14* Source: Central Bank of Brazil *Finance Ministry Forecast Source: Banco Central the Brazilian oil industry by invest- years, it may be the world’s sixth larg- ing US$220 billion to build new oil est oil exporter.