What’s to be expected for the future of Brazil

July 21, 2016

Developing countries attract the attention of investors by offering good opportunities and new markets, making them attractive for anyone thinking of expanding their business. A country that always caught my attention was Brazil. I remember that in 2012, the year of the Olympic Games in London, the Latin American country, according to the German bank WestLB ranking, had passed the UK as the sixth largest economy in the world.

Today, four years later, as Brazil prepares to host the Olympics in Rio de Janeiro, the scenario in the country is quite different. The headlines are about the removal of President Dilma Rousseff, a new interim government, and unfavorable economic numbers. From the investor’s point of view, what can we expect from all these recent events in Brazil?

To shed some light on this broad question, I found the opinion of renowned Brazilian economist Ricardo Amorim interesting. According to him, it is necessary first of all to understand what happens in Brazil – there is both an economic and political crisis. ‘The economic crisis without resolving the political one is absolutely infeasible. On the other hand, only the economic side of the crisis is easier to solve than most believe,” says Ricardo in a video posted on his Facebook page.

He further explains the scenario for 2016, and how it would be advisable to wait for things to improve – last year Brazil’s GDP fell by 3.8% and many expect it to fall similarly this year.

Faced with an uncertain environment between making or not making an investment in Brazil, the best thing to do is to remain cautious and seek a competent and experienced adviser to evaluate all scenarios that the future may present.