Brazil Economic Outlook

Kevin Burdet
Status: Instable and Recessionary
 Current Outlook: Corruption and
Commodity Dependence
Tax Breaks on Favored Industries (Petrobras Scandal)
Estimated $1.8 billion in corruption money from bribery.
Politicians and businessmen arrested (Operation Car Wash)

Commodity Price Shocks (Oil, Soy, Iron)

Currency Appreciation: 25% to USD to pay for exports
High Interest Rate 14.25% keeping appreciation high
(Petrobras Stock)
 Competitiveness Analysis
Advantages:
Market Size (5th largest country)
Raw materials (oil, iron ore, soybeans)
Contracts and Property Rights (+2 Registering Prop; +8
Enforcing contracts)

Disadvantages:
Commodity Dependence
Political Turmoil
Deteriorating Goods and Labor
Political Issues
Consumption and Investment
Savings Rate
 Deteriorating Goods and Labor
Changes in Inventories: -8410 Million BRL

Industrial Production: -4.9%

Manufacturing Production: -4.12%

Capital Flows: $75.9 Million USD

Mining Production: -9.12%

Employment Change: -3.6%

Focus on Resource-Based Economy

 Effects on Global Economy
Brazilian Exports: increased 301% from 2002 to 2012
China: 41.2%
USA: 26.7%
Argentina (MERCOSUR): 18%
Netherlands: 15%
Imports increased 372% at this time.
Commodities: Soybeans, Iron Ore (China); Mineral Fuel, Oil,
Iron, Beverages (USA); Iron (Argentina Regulations)
 Long-Term Outlook Temer Policy
Limit Public Expenses for 20 years
Restoring Social Security System

Business-Friendly Environment
Deregulating Labor Market
Streamlining Environmental Permits

Operation Car Wash has just begun and has more to reveal.
 References
https://www.bloomberg.com/quicktake/brazils-highs-lows

http://www.economist.com/news/leaders/21684779-disaster-looms-latin-americas-biggest-economy-
brazils-fall

http://thebrazilbusiness.com/article/largest-trading-partners-of-brazil

http://www.bbc.com/news/world-latin-america-38034497

World Bank & OECD National Accounts:

http://www.doingbusiness.org/data/exploreeconomies/brazil#getting-electricity

World Economic Forum:

http://reports.weforum.org/global-competitiveness-index/country-profiles/#economy=BRA

FRED (IMF Data): https://fred.stlouisfed.org/series/GGNLBABRA188N

Trading Economics: http://www.tradingeconomics.com/brazil/indicators

http://finance.yahoo.com/quote/PBR?ltr=1