What investors and businesses can expect from Brazil’s economy in 2020

Although last year was less satisfying from the perspective of many economists, most of Brazilian business leaders expect 2020 to be a positive year for their companies, according to a recent survey.

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After two years of severe recession between 2015 and 2016, Brazil’s economy could turn the page and is recovering on a moderate level for already two years now. Especially, with the election of President Jair Bolsonaro many economists have regained their confidence and predicted a significant increase regarding the country’s GDP and foreign investments.

However, accompanying the latest occurrences, Brazil’s situation seems to be more difficult than expected. According to the rating agency Fitch, the challenging political landscape, also marked by issues related to corruption and problems in the articulation of Jair Bolsonaro’s government, constrain the progress of important fiscal and economic reforms.

That is why experts soon had to reduce their expectations regarding the GDP increase for the last year from 2,1 to 1,9 percent. According to recent announcements, though, the Brazilian economy probably will register a plus of about 1,1 percent at least – identical with the year before.

Survey: 2020 will be a positive year

Asking Brazilian business leaders, the perspective is quite positive. Seven from ten participants in a survey, organized by the global consultant firm Deloitte, believe that the 2020 will be a good year for their businesses. For its survey Deloitte interviewed 1.377 companies, that together bill about R$ 3,5 trillion per year equivalent to half of the country’s wealth.

Most of the respondents (72%) confirmed that they plan to maintain the actual workforce, while more than half (58%) pointed out that they intend to increase the number of employees. The survey was carried out in November 2019. For Altair Rossato, CEO of Deloitte Brasil, the positive results were mainly influenced by the period’s last economic development – the GDP for the third quarter of 2019 had grown by 0.6%.

“The third quarter GDP results are in line with the positive expectation of entrepreneurs, who have been seeing signs of improvement in their daily lives,” says Altair Rossato, according to the Brazilian online magazine Exame.com.br.

Priority actions for Brazil

When asked about what they think would be a priority for Brazil’s economy in order to become for prosperous, 79% indicated the stimulation of job creation.

In addition to that, investments in infrastructure (railways, highways, waterways and ports, with 57%), expansion of the Brazilian economy’s participation in foreign trade (54%) and increase in the number of concessions and auctions (52%) were mentioned.

Written by using information from Exame.com.br.

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