Amid Europe’s wavering economy, Brazil has been struggling with financial and geopolitical developments, but entrepreneur Flavio Maluf say’s a broad set of indicators conclude Brazil is bouncing back. In February 2016, Brazilian exports showed an impressive increase that had been dismal since August 2014.
According to data from the National Accounts of IBGE (Brazilian Institute of Geography and Statistics, the industrial sector has increased by about 0.3%, and analysts are saying that Brazil’s crisis has taken a turn for the better. In fact, the industrial sector has shown increases for five consecutive months. Of the 24 industry sectors monitored by IBGE, 11 increased production from June to July. “Private consumption, and inventories contributed to overall positive development and there has been a strong second half-year,” says Flavio Maluf. “Despite high inflation and budget deficits, exports are growing,” Maluf pointed out.
Brazil’s 37th President, Michel Temer is expected to implement important reforms to improve the state budget, which is the basis for sustainable growth. The new government promises rapid measures to revive the economy and restore the state budget. With these reforms, the economy is expected to gradually pick up and Brazil should come out of the recession in early 2017.
Slight Improvement Despite High Unemployment
Brazil’s unemployment has almost doubled since the end of 2014, and was 11.8% in September 2016. This means that about 12 million people are unemployed and unfortunately, the trend is rising. In addition, real income declined further, and households’ access to loans remained limited. Brazilians rate inflation, unemployment, income and debt much more positively than they did a year ago, but are still critical of the purchase of expensive goods. Yet, exports are on a high.
“In the first two months of 2016, exports surpassed imports by nearly $4 billion dollars,” says Eucatex CEO, Flavio Maluf. With improved exports, analysts have already projected 2017 will see a 2% increase in the GDP. After a period of increased uncertainty and volatility, Brazilian financial markets are beginning to reassure themselves, and the partial fears have lapsed. “If confidence levels continue to improve, recovery will be even greater,” says Maluf.