Investor confidence in Brazil has hit its highest level since June 2013, in a clear sign of the country’s economic reactivation following the turmoil of the global pandemic that will be welcomed by investors interested in doing business in Brazil.
According to data from the Getulio Vargas Foundation (FGV), an economic institute, Brazil saw its Business Confidence Index (ICE) rise 0.5 points in August to hit 102.4 points — the highest score the Index has registered since June 2013.
FGV assesses ICE on a 100-point ‘neutrality scale,’ whereby scores over 100 demonstrate significant confidence. The latest result marks the fifth consecutive month of growing investor confidence, up from 85.5 in March to first breaching the 100 point benchmark in July.
“The result suggests that economic activity continues to accelerate in the third quarter,” Aloisio Campelo Jr, FGV’s statistics superintendent, was reported as saying.
Campelo however noted that although the results show continued growth in investor confidence in Brazil, they do not reflect the strong improvement seen the previous month.
FGV calculates ICE based upon 49 economic sub-sectors. These are drawn from the four major sectors of commerce, industry, services and construction. Investor confidence was reported to have increased in relation to 26 of these, compared to 36 in July.
According to the study, significant growth in construction and services industries was responsible for the increase in investor confidence.
Brazil’s confidence levels are rising, a sign of recovery
The news that Brazilian investors are more confident than ever is a sign that there is hope for recovery from the economic ructions that the COVID-19 pandemic has caused in Latin America and the rest of the globe.
Known as ‘the Giant of South America,’ Brazil is the largest economy in Latin America and eighth-largest in the world, registering a gross domestic product (GDP) of $1.84 trillion in 2019 (all figures in USD).
That same year, the country’s gross national income (GNI) was $9,130 per capita — a figure that placed Brazil as a prosperous upper-middle income nation by standards established by the World Bank.
The country is known for being a major source of primary and agricultural products, making it a major trade hub. Some of Brazil’s most significant export products include coffee, soybeans, and timber, with Argentina, Chile, China, the Netherlands, and the United States among their most important trading partners.
Brazil is also a founding Member of the Southern Common Market (Mercosur) — a 30-year old regional economic association that also includes Argentina, Paraguay, and Uruguay. Bolivia is currently awaiting formal recognition by the bloc.
Brazil has a large population of more than 21 million people and a growing middle class. Brazil is home to a thriving and well-recognized profession services industry. Its major urban centers are Sao Paulo, Rio de Janeiro, and Sao Paulo.
All of these factors contribute to the country being a popular place for investment. Foreign direct investment (FDI), in 2019 standing at $69.2 billion — the fourth-highest inflow registered globally.
Brazil’s investor confidence is growing and the country can expect to see an increase in inflows as it recovers from the global health crisis.
Biz Latin Hub is able to assist you in Brazil.
Investor confidence is increasing in Brazil and Biz Latin Hub has a multilingual team to provide the integrated back office services you need to make the most of the opportunities in the market. Whether you want help with market entry or ongoing operations, our comprehensive portfolio of services — including company formation, accounting & taxation, legal , recruiting, and due diligence — means we can provide a tailored package suited to your needs.
Contact us today to discuss how we could support you in Brazil or any of the 17 markets in Latin America and the Caribbean, where we have local team members.
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