Business

IS BRAZIL BACK, FINALLY?

The political change of Brazil in early 2019 served to revive the optimism of the country’s economy, and also made the eyes of big companies and major economies return to Brazil again. Experts speculate and believe in the recovery of attractiveness for the entrepreneurial world, retaking the Brazilian image as one of the greatest economic powers of Latin America and the World.

One sign of this movement is the degree of divergence between economists’ projections, which at the beginning of the year has the lowest rate since 2007. The figures for this divergence show a decrease in the gap between the more optimistic estimates and the pessimistic GDP growth rates. Difference that fell from almost 3% to 1.7% between December 2018 and January this year, according to data from the Focus survey of the Central Bank of Brazil.

According to economists, this greater convergence signals a more confident and predictable scenario after years of uncertainty. Facilitating mid and long term planning, this scenario stimulates a significant increase in new investments, both from Brazilian companies and from international investors.

This new perspective places Brazil with significant improvement in the economic climate, leading the growth of Latin America, according to data informed by the Getúlio Vargas Foundation. The indicator of Brazil’s economic climate increased from 33.9 points in October 2018 to 3.6 points in January 2019. Recovery was mainly due to the increase in the indicator of expectations. An improvement that has reversed the scenario of recent years, putting Latin American numbers ahead of the global index.

Mauricio Costa, HUB55’s Director of Technology Update, says that the contact with US investors already shows a growing interest in Brazil, with constant questions about our impression of the probable economic recovery. “Our experience in representing Latin American companies (Openlink, Triple Point) and Canadians (Civis, Sponsorium) in the last ten years shows that from 2015 onwards there has been a significant reversal in the investments of IT companies, that the perspectives show signs of yielding with the advent of the new government and the promise of social security and fiscal reforms. ”

This positive outlook for the current Brazilian market is also due to its potential for breadth and diversity, which places the country as the 9th largest economy in the world. The IT market, for example, in which Brazil is the 5th largest, is expected to grow by 10.5% in 2019. The forecast presented by IDC, the market intelligence company of the area, encourages entrepreneurs in the sector and opens possibilities for new businesses to develop.

Mauricio Costa says: “Being one of the largest IT markets in the world, even though it is showing lower growth in the last few years, it is inevitable that the main players of the sector will be attracted again to Brazil. And as a side effect, also for the other countries of Latin America. ” (Click here for Forbe’s report The Growing Role Of Latin America In The Technology Industry).

Another market that deserves prominence and brings optimism is the aerospace, with Boeing-Embraer joint venture approved by shareholders and lots of investments being made in the Brazilian city of São José dos Campos, cited by the Financial Times as the most strategic pole of the aerospace sector, ahead of cities in Canada and the United States.

The changes in these scenarios are really encouraging for those who undertake within the country, fostering national and international partnerships, connections and stimulating the development of our ecosystem of innovation. Therefore, if we are to take this moment into account, Brazil does re-emerge as a potential market for companies to invest, develop and open new businesses. These situations lead one to believe that the time of Brazil to recover can, yes, finally have arrived.