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IMF forecasts Brazilian economic growth of 4.7%

Date added: 28th January, 2010 at 09:07
(view all articles from January, 2010)

Categories: Economy

Brazil's economy has been projected to quickly bounce back from the recession and become one of the fastest economies in the world to recover.

The latest forecast from the International Monetary Fund (IMF) suggests investment in Brazil could be a safer option than in some other countries with its economy set to grow by 4.7 per cent this year.

Brazil's economy is then expected to grow by a further 3.7 per cent in 2011.

The Brazilian economy only shrank by 0.4 per cent last year, leaving it one of the least hit by the global financial slowdown.

It is expected the results could encourage companies to make an investment in Brazil, with the country set to become one of the strongest economies in the world.

Tourism revenue will be boosted with the World Cup in 2014 and the Olympic Games in 2016 both to be held in the country.

IMF managing director Dominique Strauss-Kahn said the IMF did not expect a double dip recession but warned countries not to rush to come out of recession.

He said: "If they exit too early and we have a new downturn in growth, then really I don't know what we can do. A lot of our toolkit in terms of fiscal and monetary policy has been used."

Vale is leading the way for companies making an investment in Brazil by announcing it will purchase the fertiliser assets of Bunge in the country, as part of the firm's plans to diversify.

Currently it is the largest iron-ore producer in the world and the second largest miner of nickel, but the company wants to expand into other areas. It has set a target of 2017 to become one of the world's biggest fertiliser producers.

Vale will spend $3.8 billion on 100 per cent of Bunge Participacoes e Investimentos SA and a 43 per cent stake in Rio De Janeiro-based Fertilizantes Fosfatados SA, previously owned by Bunge.

Brazil is seeking to reduce its dependency on imported goods. It is already the largest producer of oranges, sugar and coffee in the world but wants to strengthen its position in the world economy further.

The economic growth in the country has led to the salaries of local people increasing and more jobs being created, giving them the opportunity to buy property in Brazil.

Schemes such as the government's Minha Casa, Minha Vida affordable housing plan have helped Brazilians to get a foot on the property ladder, by providing both homes and low-cost mortgages.

However, with the housing shortage in Brazil estimated at eight million, there is still room for improvement and scope for investors to make returns from affordable housing projects. ADNFCR-1477-ID-19582952-ADNFCR