Octavio de Barros of Bradesco
The overview of the Brazilian economy was presented by Octavio de Barros of Bradesco, and he had your blogger running to the registration desk for the similtaneous translation headset. With this done, Octavio took us on a fast ride through a multitude of slides covering issues such as the destination of exports. In 2000, just 1% of Brazilian exports were going to China, today it is close to 13%, whereas to the US it has dropped off a lot over the same period. Massive changes.
Brazil will create 2,000,000 new jobs this year in the formal economy, unemployment is at its all time low, fear of losing a job is at its lowest level ever so consumer confidence is very high (as already touched on, credit growth is taking place at a very fast pace). Salary mass growing at 6.5% a year (both formal and informal). There are risks, inflation being one, overheating being another. Banks are revising up GDP growth numbers for 2010 to around 6.5%, but Octavio feels Brazil cannot sustain this level – its a 4.5% growth country. But overall the situation is very positive. You just have to look at the employment charts, no-one could have dreamed 20 years ago that we are in the place we are today.
The election should not be a concern to any foreign investor, regardless who wins, Brazil will have its largest infrastructure investment cycle ever, the government will follow a policy of creating national champions in each sector. For risks, just watch out for China, Brazils future is totally tied to what happens in China..
He left us with a quote from Victor Hugo “there is nothing more powerful than an idea whose time has come”.