Many economists believe Brazil’s economy is poised for a jump, particularly due to the FIFA World Cup and Olympic Games that are to be hosted within the next three years, and Florida is placing the same bets. The Florida Chamber of Commerce reports that Brazil is its number one trade partner and has worked hard to strengthen those ties in recent years. Florida is also courting other international investors from places like Colombia and China by offering residency deals to prospective investors. The wager seems to be paying off, although some remain skeptical that Brazil will end up being the cash cow everyone hopes it will be. For more on this continue reading the following article from JDSupra.
In the past few posts, we’ve delved into international investment in the Florida economy, particularly the Florida real estate markets as China looks primed to become a major investment source for Florida (especially Miami) and as people like Governor Scott are actively promoting the benefits of investing here to investors in places like Columbia.
Brazil is Florida’s No. 1 Trade Partner
However, truth is that today, Brazil remains Florida’s number one trade partner according to the Florida Chamber of Commerce – and that’s not expected to lessen in the near future. In fact, the Florida Chamber has just debuted a web site dedicated specifically to the growing trade partnership between the State of Florida and the country of Brazil: you can visit it here.
Brazil’s Florida trade market was valued at around $14 million in 2010 according to the Chamber, and the Chamber is working hard to increase those numbers in the upcoming years. So, how steady and strong is the Brazilian economy? According to experts, things are very (VERY) good for Brazil.
Brazil’s Economy – Some Highly Respected Experts View Brazil’s Future is Bright
In an analysis done for CNN by Paulo Sotero this week, the noted scholar and expert on all things Brazilian opined that Brazil’s president Dilma Rouseff will see 2013 to be the year when Rouseff proves her worth.
Brazilian President Rousseff has made a public commitment to boost Brazil’s GDP to 4% in 2013. According to the CNN editorial, experts believe that Brazil’s investment ratio to GDP (now at 19%) will have to get to somewhere between 23% and 25% for the president to meet that goal, and it’s doable: Mexico, Columbia, and other Latin American countries are seeing ratios somewhere between 23 – 25 percent these days. There are concerns that President Rouseff must work to build trust between her government and the private business sector and there are concerns that she will not be able to solidify a bond between her office and Brazilian investors.
However, the CNN piece points out that Rouseff has a reputation of being "no nonsense" and able to act quickly in making decisions and implementing them: her record on dealing with corruption has garnered her much respect. It’s predicted that she will see a growing investment relationship between Brazil and the United States as important for her country (and for which, Florida of course would reap a benefit).
Meanwhile, even though Brazil didn’t grow as fast as predicted, S&P (Standard & Poors) remains "cautiously positive" on Brazil’s sovereign credit rating as reported by S&P yesterday. The agency’s managing director is reporting that S&P isn’t concerned about Brazil’s slower than expected growth and they expect good things in 2013.
This morning, the president of Brazil’s central bank, economist Alexandre Tombini, spoke to a Brazilian congressional hearing and as reported by Reuters, Tombini forecasts that Brazil’s economy will grow faster in 2013 with domestic demand as its major force in Brazil’s bright economic future.
Bloomberg is reporting that Brazil’s Finance Minister predicted last week that interest rate cuts by the country’s central bank will stimulate Brazil’s economy, and the weaker Brazilian currency (the real) will boost competition.
Last month, Reuters took a poll of noted economists and discovered a consensus that Brazil’s economy in the 3d quarter of 2012 was expected to have grown at its fastest rate in over 2 years, due in part to lowered taxes.
Even though the actual numbers didn’t show such a growth spurt, in an article for NASDAQ, Goldman Sachs is still predicting that Brazil should boom with growth of 4% or higher in the year 2013 (quoting Jim O’Neill, chair of Goldman Sachs Asset Management). Economist O’Neill views Brazil as one of the world’s big emerging markets, in fact, along with Russia, India, and China ("BRIC").
Others Aren’t So Sure About Brazil
Still, despite all this optimism, there are those that do not view 2013-2014 as being golden years for Brazil. Forbes, for example, has an article written by contributor Kenneth Rapoza that doesn’t see Brazil’s economy as more than perhaps "dismal."
Right now, people in Florida (like the Chamber of Commerce) are believing in Brazil as are investment advisors like Goldman Sachs: there are always negatives in every scenario, but for Florida – particularly its commercial real estate market – pushing for the positives brings a needed energy to our beaten economic climate.
Let’s hope that the positive forecasts for Brazil prove to be true: because what is good for Brazil may well bring Florida a brighter economic future, as well.
This article was republished with permission from JDSupra.