Brazilian industries ‘continue to attract investors’
Brazilian property investors may be flocking to the country as experts report that industries continue to expand and the economy is holding firm, despite the global financial crisis.
In October, President Luiz Inacio Lula da Silva declared that the credit crunch would not affect infrastructure in Brazil, saying the country should “go on the attack” and encourage continued investment.
President Lula’s appeal seems to have worked, as last week the Aurora Gold Corporation announced that it is to increase exploration of the Sao Joao region, expecting to find a wealth of minerals for mining, including gold.
It is just one of the industries in Brazil which has seen recent growth, attracting investors from around the world and keeping the country’s economy expanding in the face of global financial difficulties.
The Brazilian Institute for Geography and Statistics reported a 6.3 per cent growth in the country’s gross domestic product in the year leading up to September 2008, with third-quarter expansion nearly seven per cent higher than the same period in 2007.
It is the oil and gas industries that are helping to precipitate this increase as there have recently been big offshore discoveries of the fuels, says Paulo Wrobel from the commercial section of the Brazilian embassy in London.
“Brazil is a world leader in the technology of the deep drilling for oil and gas and these recent discoveries keep attracting the big international multinationals in the oil and gas sector,” states Mr Wrobel.
He confirms that minerals are big business for the country, another industry in which he says Brazil is flying high and adds that “agribusiness” is booming in the country.
“There is a lot of investment brought from the United States in areas such as sugar cane, beef, coffee and all the agriculture commodities where Brazil is a world leader,” he asserts.
Farming exports for the first nine months of the year were up by a third compared to the whole of 2007, according to the National Agriculture and Livestock Federation.
Trade in soya saw a massive increase between January and September, with volumes up by around 70 per cent, the organisation reported in October.
Mr Wrobel describes Brazil as a “business giant”, saying the country has been the “fifth or sixth largest attractor of foreign investment” in the last two or three years.
He believes this is set to continue into the new year.
“Brazil is holding quite well. One has to wait to see how 2009 will go and maybe some investors will postpone investment in certain areas but there has been no big major postponement so far,” he says.
It appears the country will continue to see expenditure in the property market next year too.
Mr Wrobel explains that although the Brazilian economy has been hit by the credit crunch, as an emerging market it was protected earlier than the worst-affected countries like the US, Britain, Japan and the rest of Europe.
“Really the financial systems were not affected, the banking system in Brazil is quite sound. Also there is no housing crisis or crisis financing housing in Brazil, ” he asserts.
Nevertheless, there have been negatives as well as positives, concedes Mr Wrobel. As a major exporter, falling commodity prices and the dry-up of imports from around the world have had an impact on Brazil.
