News

Brazil's Latin America

Release Date

12 April 2011

Despite the challenges brought by the world’s recent economic downturn, Latin American countries demonstrated enormous resilience in overcoming the negative effects of the period. The region’s quick recovery has demonstrated a greater stability when several countries started registering promising growth rates early in 2010.

Latin American development has been driven mostly by net commodity exporting countries such as Brazil, Chile, Colombia, Mexico, and Peru. These have faced favourable external conditions such as high commodity prices. In addition, increasing foreign investments helped the region grow with above world average pace. Many say that this positive outcome is due to a stronger macroeconomic structure, reformed policy frameworks, and rapid policy responses to support economic activity. On the other hand, Caribbean countries which depend greatly on tourism and the imports of commodity are expected to face greater challenges in recovering from the crisis.

Growth Phenomenon

Between the Latin American countries, Brazil seems to be the one constantly falling into the spotlight. It is not only the region’s largest economy but the one with the biggest population, territory and number of resources. According to the Brazilian Institute for Geography and Statistics (IBGE), the country’s economy grew 7.5% in 2010 and is currently registering the biggest industrial acceleration of the last 25 years. But the high economical growth is not the only indicator of improvement. The poverty alleviation that has taken place in recent years shows that the Brazilian government is destined to eradicate poverty from its territory whirls improving the quality of life. Moreover, according to the International Monetary Fund (IMF), Brazilian economy is now close to US$2.2 trillion, making it the seventh-largest economy in the world and according to forecasts, it should reach the fifth position by the next decade.

Additionally, since it won the rights to host the next 2014 FIFA World Cup and the 2016 Olympic Games, Brazil has been investing heavily in infrastructure. The country’s aged airports and rail lines are now receiving billions of dollars in investments from the federal government in order not to fall behind. This effort however is not new. Back in 2007, former President Lula launched Brazil’s Plan of Accelerated Growth (PAC). The plan has the purpose of boosting the country’s development with considerable investments in infrastructure. A sum of approximately US$300 billion has already been spent since the first stage of the program. Now, Brazil’s new President Dilma Rousseff has launched the PAC2 with an increased budged of approximately US$946 billion until 2020. Also worth noting that 60% of it should be invested until 2014. Let the ‘investment carnival’ begin!

Contact Australian Business Consulting and Solutions for further information on the Brazilian and Latin American markets. We also offer information on Strategic Planning, International Marketing Plans, Market Research and much more.

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