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Brazil - Economic

Overview


Brazil Washington Sousa
LG Meeting 16/05/2013

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Economic overview of Brazil 2013 SP, BRAZIL
1. Brazil: Macro Economic Overview
Brazil was favored by intuition measures taken by the last two governments
President Lula and Dilma who has given continuity to the FHC policy and also in
the following aspects.:
Government did not allowed to Banks operates with derivates in a high scale as
seen in Europe and EUA avoiding the problems lived for those economy
Brazil is a kind of closed economy whose timid posture helped on those years
when the world economy started to present a strong recession as we have an
important domestic market
Brazil was also very favored in the exportations by the increase prices of
commodities , could elevate the volume of importations which brought favorable
effects to the inflation
Brazil accumulated an important volume of international reserves
Finally Brazil received its Investment Grade
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2. Brazil: Macroeconomic Overview

The last 15 years Brazil have been recognized by a complete democracy with prices
stability
Provided larger access to credit
Started to integrate million of people from the classes D/E to the formal economy
But currently this model based on credit and consumption has been discussed
Consumers has reached a high level of indebtedness considered already dangerous
for some specialists.
From this point of view .currently some questions requires difficult answers.
Date
1 Economic overview of Brazil 2013 SP, BRAZIL
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3. Brazil: Some Macroeconomic Indicators

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1 Economic overview of Brazil 2013 SP, BRAZIL
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4. Brazil: Macroeconomic Overview

Recent Slowdown in Economic Growth is a little bit more intense than
expected
More governament intervention in strategical sectors such as electric
power and oil.
Low investment rate ( near to 18% of GDP)
More governament intervention in the Central Bank
Higher food inflation and service inflation
By the other hand the labor market is still very resilient.
And some events like 2014 Soccer World Cup and 2016 Olimpic Games
would heat the market.

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5. Brazil: Macroeconomic Overview 2013 a
Challenge Year
Could Brazil continues with the current fiscal policy ( sectorial tax
incentives) and monetary police ( inflation, interest rate , FX rate)?
Or it will be necessary:
Take strong measures to adjust the current account defict and major public
expenses, before of the next election?
Is it necessary an increase in the interest rate and a more effective action
on the FX ratio?
These are some questions for our reflection!!
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LATIN AMERICAN SEMINAR / VALLE DEL BRAVO 2013 - MEXICO 6
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6. Brazil: Retail Sector / Mobile Phones

Sales in the retail sector will continue growing but in a slower rhythm as
verified in the recent months
Problem: the consumption was growing too fast through indebtedness
Families hired bank debt beyond income levels to finance consumption
Regarding the mobiles , Brazil answers for more than one third of all mobile
users in Latin America and the Caribbean
At global level, Brazils mobile market is the number 5 in the world
Mobile penetration is high and still growing by about 7% annually
Brazils middle class is an increasingly avid consumer of smart phones
Moreover, almost one fourth of the population still has no mobile phone at all.



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1 Economic overview of Brazil 2013 SP, BRAZIL
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7. Brazil: Mobiles Sector

The mobile market is being boosted by the growth of 3G handsets and
mobile broadband
Market requires a best service on the part of the carriers;
Major risk ahead: countrys lower growth, major inflation and increase in the
non payments or delays levels.
Date
1 Economic overview of Brazil 2013 SP, BRAZIL

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