Investment in Rio 'could bring greater income'
Date added: 27th July, 2010 at 13:42
(view all articles from July, 2010)
Investment in Rio de Janeiro and other parts of Brazil is a good opportunity for speculators looking for income, one commentator has said.
Writing for the Daily Mail, Brett Diment suggested that Latin America is not a region many would look to for consistent returns, but over the last decade the country has benefitted from the strict adherence to fiscal and monetary policies by its government and central bank.
According to the expert, people have typically been ploughing their money into UK equity income funds but the global downturn and, more recently, the suspension of BP's dividend payouts have seen investors look elsewhere for their earnings.
Financial stability in Brazil has borne the right conditions for domestic growth and investment, the commentator suggested.
Indeed, the country's finance minister Guido Mantega recently estimated that the economy could expand between six and 6.5 per cent in 2010 and the investment rate could increase to 19 per cent of gross domestic product (GDP) by the end of the year.
There has been some concern over the overheating of the Brazilian economy, with a GDP expansion of 4.5 to five per cent expected in 2011, the expert noted.
"[However] it needs to be remembered that government and central banks are addressing this issue from a position of strength," he said.
Although the region has profited from its abundance of natural resources, Mr Diment indicated that it would not be fair to see Brazil as simply a trader of commodities.
Instead, domestic consumption is becoming a more interesting factor to investors considering speculation in the nation, he continued, with consumerism and higher salaries driving growth.
The rate of unemployment decreased by 0.5 per cent in June compared with May, according to figures from Brazil's national statistics office Instituto Brasileiro de Geografia e Estatistica, while average real income jumped in the month by 0.5 per cent.
As the population becomes wealthier, so do the nation's banks, retailers and drinks companies and, according to the homebuilder Grafisa, the real estate industry is also being boosted.
The country's leading property developer reported strong first quarter profits this year, citing the minha casa, minha vida - my house, my life - affordable housing scheme and Brazil's burgeoning middle class demographic as key drivers for its prosperity.
Public debts owed by the country are low in comparison to more developed nations, Mr Diment continued, with economic growth set to continue.
For anyone wishing to invest in the full potential of Brazil, Property Bond Brazil has an excellent array of opportunities for investment in Rio de Janeiro.
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