brazil report 2007

Unemployment 2002 unemployment rate 2003 2004 2005

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Unformatted text preview: labour relations and social security areas. Unemployment 2002 Unemployment rate (%) 2003 2004 2005 11.7 12.3 11.5 9.8 Source: EIU, July 2006 ECONOMIC FORECAST Reaching higher economic growth rates The likelihood of the new President (to be elected in October 2006) carrying out political, tax and pension reforms at the beginning of the mandate will be decisive to getting sustainable and higher economic growth rates. A gradual decrease in the interest rates, already in place, will also be important to improve the domestic consumer market and to push investment incentives in the private sector. Externally, as soon as some domestic indicators show improvement and Brazil gets an investment grade rating, a strong inflow of direct foreign investment in the economy is expected. Key economic forecasts 2006 2007 2008 GDP growth (%) 3.4 3.3 3.6 CPI (%) 4.7 4.5 4.4 Unemployment rate (%) 9.7 9.6 9.1 Source: EIU, July 2006 3 2006/2007 FROM SÃO PAULO TO SHANGHAI New consumer dynamics: the impact on modern retailing* Brazil REGULATORY ENVIRONMENT An attractive regulatory environment FOREIGN DIRECT INVESTMENT Boosting foreign direct investment Brazil has historically been one of the preferred countries for foreign investors as registered capital and earnings may generally be repatriated on a tax-free basis. After some years of relatively low inflow level, foreign direct investment (FDI) is now on the upswing, reaching USD18.3 billion in 2004. The upgrade to investment grade level will probably boost FDI in Brazil, ranking the country amidst the three most favoured FDI destinations in the world1. Retail and consumer, and particularly the Food & Beverage segment, was the most attractive sector for FDI in Brazil in 2005, with more than USD5 billion invested2. In this complex, sizeable and diversified economy, opportunities often rise for strategic and financial investors. Strategic players have definitely prioritised the Brazilian market as core in their global presence, independently of whether they are large corporations or medium-sized companies. On the financial investor side, private equity funds have significantly increased their participation in the market, particularly through those companies with high potential to be attractive in an initial public offering (IPO). FDI 2002 2003 2004 2005 FDI (BRL bn) 48.5 31.2 53.1 37.0 FDI (USD bn) 16.7 10.1 18.3 15.6 Source: EIU, July 2006 PROPERTy/REAL ESTATE REGULATIONS Few restrictions on foreign ownership Currently, the Brazilian property market is very attractive for both, local and foreign investors. In general, local or foreign investors are welcome and treated equally as regards investments incentives or tax concessions. Very few restrictions are imposed on foreign ownership, except, for instance, for national security reasons in the areas of defence and communications. 1 2 Brazil Business magazine Central Bank of Brazil 4 2006/2007 FROM SÃO PAULO TO SHANGHAI New consumer dynamics: the impact on modern retailing* Brazil Major global retailers and consumer products manufacturers have entered and expanded their operations in the Brazilian market, mainly through acquisitions, followed by organic growth by opening new stores, logistic parks, or industrial plant...
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This document was uploaded on 02/14/2014 for the course MBA MBA at SPSU.

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