Brazil's economy is starting to recover, boosting the overall business outlook for this year, foreign executives say.
BY JOACHIM BAMRUD
Foreign multinationals are seeing a recovery in Brazil’s economy, Latin America’s largest, after a weak first quarter.
”The Brazil economic rebound is widespread, swift and real,” says Leo Rodriguez, president of Latin America for Emerson and Emerson Process Management. “We are seeing CAPEX and OPEX spending across all of our served capital markets.”
Second quarter numbers won’t be ready until next month, but the first quarter showed a GDP decline of 0.8 percent after a 3.6 percent fall in the fourth quarter of 2008. Brazil’s economy will fall by 0.34 percent this year overall, according to a central bank survey of 100 economists last week. That’s better than the 1.3 percent decline predicted by the International Monetary Fund last month.
“Although the year’s first quarter brought many economic uncertainties felt throughout the world, it seems Brazil experienced a lesser impact of the global financial crisis and has already rebounded from the decline it did undergo,” says Hector Alonso, managing director for Global Crossing Latin America. “While it is too early to declare victory, we see Brazil moving forward and once again taking its place as the region’s growth engine.”
During the crisis, Brazil managed to improve its already high credibility among foreign investors, argues Sergio Chaia, president of Nextel Brazil, a unit of U.S.-based NII Holdings. “Firstly, Brazil has adopted conservative credit policies and as a result has been able to gain the trust of the consumer market,” he says. “Secondly, large multinationals have made investments in Brazil a priority, because they trust the stability of our market. I believe that as a result of these trends, after this phase of upheaval, the country will have more credibility in the international market than ever before.”
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Keywords: Aracruz, Banco do Brasil, BM&F Bovespa, Bulltick, Emerson, Global Crossing, GOL, JBS, Nextel, Orange, Petrobras, Redecard, Suzano, Symantec
Brazil Business Outlook Q&A
Panel: Emerson, Global Crossing, Nextel, Orange, Symantec