Brazilian property market ‘helping to shore up economy’
The Brazilian property market is just one of the sectors helping to steer the country out of the economic downturn, according to an expert.
President Luiz Inacio Lula da Silva has persistently insisted in the last few months that Brazil’s economy will continue to grow.
Despite predictions from financiers that the wealth will shrink, the leader has predicted a level of expansion, although he has acknowledged that it will be less than originally forecast.
Paulo Wrobel, representative from the economic and trade arm of the Brazilian embassy, says the country has suffered from the effects of the credit crunch just as other nations have, although it has not felt the same impact as the US, Japan and European states.
“The situation in the industrial sector particularly has started getting better from late last year. January and February [saw] a slight recovery and in March there were some signals of recovery,” he states.
Mr Wrobel confirms that one of the emerging markets is the property sector, with plenty of interest from foreign investors.
“From Europe there [was] quite a lot of interest in the last few years, not only for new housing but also in the tourist sector as well. Because it is such a vast country, there are many opportunities in the tourist sector,” he asserts.
He says that one of the most important industries for Brazil is energy, with investment in oil and gas holding up well and recent offshore discoveries enhancing the country’s appeal in this sector.
Mr Wrobel points to the success of partnerships with BP in Britain, Portugal’s Galp and America’s Exobil, which he says has just announced a significant deal with Petrobras, adding in that “this particular sector is not suffering”.
Two of the areas that have struggled are the automotive and aeronautical manufacturing industries, which have suffered from a lack of demand for their products.
Brazilian aircraft maker Embraer was forced to make a series of redundancies last year and is currently focused on trying to stay profitable, Mr Wrobel explains.
He adds that there has been a recent turnaround in the car manufacturing industry due to the government implementing a tax relief, with January and February sales rising quite substantially, although he emphasises that it is just one step towards improving the situation.
In terms of agriculture, which is an important business for Brazilians, the recession has had a big impact, with international demand “collapsing” for a time, says Mr Wrobel.
“But recent figures are encouraging. One can’t say that this is a real recovery – one has to wait for another couple of weeks to see how the economy will behave,” he continues.
“When there is a recession things like prices of land, for instance, go down and it becomes more attractive for foreign investors,” he states.
The sugar cane business, which is a major element of agricultural industry in Brazil, has held up well under external financial strain, continuing to attract investment from abroad, Mr Wrobel says.
As far as the future is concerned, energy will remain as important as ever and will be one of the main attractions for overseas investors, with the embassy receiving many enquiries from companies in the UKhoping to put their money into the industry.
