Economy, Commerce & Trade
São Paulo - © Wanderlei Celestino/SPTuris
Brazil: A country of Trade & Investment Opportunities
In these times of global financial turmoil and enormous challenges, finding new business opportunities becomes crucial. Since the Irish economy is currently struggling to provide a favourable environment for sustainable production and employment growth, it is critical to Irish businessmen to focus their attention overseas, in particular towards fast-growing markets, such as Brazil.
The Brazilian economy is forecasted to grow approximately 5% in 2010. This remarkable economic performance is based not only on a strong export performance, but, primarily, on an increasing domestic demand. Over the last four years alone, Brazil’s middle class has increased by 24%, removing roughly 20 million people from the poverty line, according to Brazil’s Census Bureau. With a population of 192 million, the economy has already achieved significant growth. Currently, Brazil’s economy ranks in ninth place, with a GDP (PPP) of US$ 1,9 trillion in 2008, and accounts for more than half of South America’s output. In addition, according to the latest World Bank report, Brazil is the second main destination for foreign direct investment among the developing countries.
Due to strong macroeconomic indicators, the Brazilian economy has become more resilient to external shocks. However, as a consequence of the reduction of commodities’ prices as well as the fall of demand for manufactured and semi-manufactured goods, the Brazilian trade flow reached US$ 202 billion in the first nine months of 2009. These figures reveal a contraction of 28.3% over the same period of 2008, reversing, thus, a growing trend that dates back to 2003. In fact, Brazilian exports and imports had been performing strongly since 2003. In the period 2003-2008, exports grew at a nominal average rate of almost 22%, while imports grew even faster, at a nominal average rate of 26% in the same period. The recent drop in the Brazilian trade flow shows that Brazil’s economy was affected to a certain extent by the international financial crisis. It has not, however, cast shadow over the sound fundamentals of the economy and the big opportunities the country offers to its partners.
Despite Brazil’s economic success, it is fair to say that the level of trade and investment between Brazil and Ireland does not match the potential of both countries. In fact, while total trade reached US$ 202 billion between January and October 2009, bilateral trade was only US$ 670 million (US$ 265 million exports from Brazil and US$ 404 million imports from Ireland). As export-led growth is the only sustainable route for Ireland, the growing Brazilian demand and the valuation of the “Real” (Brazil’s national currency) will certainly ensure high levels of imports in the coming years. On the other hand, Brazil is an important and competitive world supplier of both manufactured and primary goods, as well as a significant service provider. Therefore, more could enter the Irish market. There is plenty of room, thus, for the increase of bilateral trade and mutual beneficial cooperation.
Despite the existence of many investment opportunities in Brazil, the share of Irish investments in the total inflow of foreign capital is negligible. On a cumulative basis, it has not reached one billion dollar. However, in 2008, Brazil attracted US$ 45 billion foreign direct investments and the estimate for the current year is US$ 25 billion.
The strong macroeconomic indicators were one of the facts that led Brazil to win the right to host the 2014 World Cup and the 2016 Olympic Games. These two major events will entail new business opportunities and investments for the enhancements of its infra-structure in the transport system, hotel accommodation, food service activities and other tourism-related services.
Brazil offers a myriad of business opportunities for Irish companies, and the Embassy of Brazil in Dublin will be most pleased to provide further information and business contacts for those willing to tap into this dynamic, transparent and predictable market.
E-mail: commercial@brazil.ie
Tel. +353 (0) 1 416 1216
Information for Importers
Brazilian Trade Promotion Network »
Customs & Excise Tariff of Ireland »
Brazilian Trade Associations
Automobiles, buses and Lorries (Portuguese) »
Computer Hardware (Portuguese) »
Computer Software (Portuguese) »
