Moody’s recently made bullish predictions for the Brazilian economy during 2017. Citing an increase in investment in Brazil on the back of rising confidence, the ratings agency forecasts positive growth, alongside the Brazilian Central Bank’s own predictions.
Speaking at a Moody’s conference in Sao Paulo at the end of September, Moody’s Investors Service Analyst Samar Maziad was encouraging about Brazil’s outlook for 2017. One of the main reasons that lead Moody’s to this prediction is the rise in business confidence, which will lead to more investment in Brazil and by extension, growth in the Brazilian economy.
Brazilian Central Bank forecasts growth for 2017
In much the same line, the Brazilian Central Bank also released their predictions for GDP growth next year. The Bank forecasts slightly higher growth than Moody’s and expects the figure to reach 1.3 per cent by the end of 2017. The Brazilian Tax Ministry is marginally more optimistic and predicts that growth in the Brazilian economy should reach 1.6 per cent next year.
The Central Bank bases its figures on strong growth in key sectors of the Brazilian economy. Agriculture is performing particularly well and economists believe the sector will see an uptick of 3.5 per cent in 2017. The services sector is also expected to do well next year.
Confidence returns to Brazilian economy
Another fundamental behind the predictions of positive growth in 2017 come from the increase in confidence in Brazil. Foreign investors have poured money into the country this year on the back of huge returns from the stock market and the performance of the Brazilian currency.
Recent figures point to new-found confidence from the Brazilians themselves. In August, the Construction Confidence Index (ICST in Brazilian) rose by 2.1 per cent to 74.6 per cent, the highest level since July 2015.
Consumer confidence also saw a surge of 1.3 per cent in September. A clear indication of this came in figures for the retail sector. Turnover rose by 1.1 per cent in the year to August and by 1.5 per cent on July.
Analysts believe this confidence is due to two factors. Firstly, there has been a change in expectations among Brazilians, probably due the change in political circumstances. The second factor can be found in the slow-down in inflation, now back on track.
“Things are certainly looking good for the Brazilian economy,” says Dies Poppeliers, Managing Director at BRIC Group. “We have seen a surge of interest in the country this year as investors clearly identify the excellent opportunities available there.”
An investment company specialising in global real estate opportunities, BRIC Group is currently developing The Coral resort, in Northeast Brazil, a luxury beachfront resort. BRIC Group also offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.
(Sources: Diario do Nordeste, WSJ)