This is the first in a series to acquaint globally minded readers with the four economies of the BRIC.
BRIC is an acronym for the economies of Brazil, Russia, India and China combined. The general consensus is that the term was first prominently used in a Goldman Sachs report from 2003, which speculated that by 2050 these four economies would be wealthier than most of the current major economic powers. This could prove a good thing to know while planning a long range strategy for your real estate business as investors from these countries are increasingly looking to invest in the United States and conceivably the greater Houston area.
For simplicity we will go in order and in this piece offer a brief overview of Brazil:
- Brazil is the largest and most populous country in South America as well as being its leading economic power and a regional leader.
- It has vast natural resources and a large labor pool.
- It is slightly smaller than the United States of America in size and shares borders with every country in South America except Chile and Ecuador.
- Portuguese is the official language.
- The Capitol is Brasilia and there are 26 states and one federal district.
- Brazil has a consulate general office in Houston.
- Brazil is expanding its presence in world markets.
- Since 2003, Brazil has steadily improved its macroeconomic stability, building up foreign reserves, and reducing its debt profile by shifting its debt burden toward real denominated and domestically held instruments.
- In 2008, Brazil became a net external creditor and two ratings agencies awarded investment grade status to its debt.
- After record growth in 2007 and 2008, the onset of the global financial crisis hit Brazil in September 2008. Brazil experienced two quarters of recession, as global demand for Brazil’s commodity-based exports dwindled and external credit dried up. However, Brazil was one of the first emerging markets to begin a recovery.
- Consumer and investor confidence revived and GDP growth returned to positive in 2010, boosted by an export recovery.
- Large capital inflows over the past year have contributed to the rapid appreciation of its currency and led the government to raise taxes on some foreign investments.
- President Dilma Rousseff has pledged to retain the previous administration’s commitment to inflation targeting by the Central Bank, a floating exchange rate, and fiscal restraint.
- Brazil’s strong growth and high interest rates make it an attractive destination for foreign investors.
- Brazil has the second largest number of airports, sandwiched between the U.S (No. 1) and Mexico.