Posts Tagged ‘economy’

Brazil Announces $880 Billion Infrastructure Plan

April 1, 2010

Brazil has announced big, big plans to build $880 billion-worth of infrastructure between 2010 and 2016.

The projects are part of an economic stimulus program whose first phase is half-completed, President Luiz Inacio Lula da Silva announced Monday.

The new plan, named the ‘Growth Acceleration Program 2’ or PAC 2, places importance on increasing the country’s energy production capacity, construction of homes and necessary improvements for hosting the 2014 football World Cup and the 2016 Summer Olympics in Rio de Janeiro.

“PAC 1 and PAC 2 are a commitment by the Brazilian state to the redemption of this country. Whoever arrives in the presidency will not be able to tear it up and do something else,” Lula said while rejecting the opposition’s allegations that the announcement only hides the electoral motives of the ruling party.

The president, however, said bureaucratic red tape has been delaying the PAC projects, which ‘cannot stop’ and must begin ‘as soon as possible.’

The new programs include construction of two million homes, which will contribute to reducing the country’s housing deficit by half, and a high-speed rail service between Rio and Sao Paulo.

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New Report Provides Positive Analysis of Brazil’s Tourism Industry

March 26, 2010

Brazil Tourism Report Q2 2010 – New Market Report Published

This quarter’s tourism report has shown that Brazil’s tourism industry has already benefited greatly from the announcement of several high profile events planned to be held in the country. The 2014 FIFA World Cup is set to be a huge draw for visitors and the addition of the 2016 Olympics in Rio de Janeiro will further boost the industry. In January 2010, the government said it would invest 1 million Brazilian reals to improve facilities throughout the country before of the World Cup. 

Inbound visitor numbers had been growing but the industry could benefit from greater stability. While arrivals rose from 4.7 million in 2001 to 7.2 million (about a 65% increase) in 2008, the report estimates a fall in that number in 2009 because of the impact on developed countries of the global financial crisis. The recovery should be relatively quick, with a forecasted increase of tourist arrivals of 9.2 million by 2014.

The number of Brazilians looking to travel within their own country and that can afford to do so is growing. According to Instituto Brasileiro de Turismo (Embratur) president Jeanine Pires, the revenue generated by tourism in 2008 was nearly 17% higher than in 2007, which was the best year on record. 

Sector growth appears to be building up momentum as the global economy recovers. Brazilian airline Gol Transportes Aéreos reported an increase in year-on-year (y-o-y) growth for January 2010. Compared with January 2009, Gol’s revenues were up by 32.1%. 

In the hotel sector news has been positive too, with French corporation Accor planning to add nearly 5,000 rooms in Brazil with an investment of about EUR200mn. This will be achieved through expansion of their 20 Formule 1 and Ibis hotels in Brazil throughout 2010.

Renovations are a positive area for investment in Brazil’s tourism infrastructure. A lack of infrastructure has held the sector back to date but this looks set to change as investment increases over the coming years.

View the report here.

To rent long and short term vacation apartments in Rio, visit RentinRio.com.

Brazil’s Favela Conditions Improving

March 25, 2010

A United Nations report published ahead of the Fifth World Urban Forum in Brazil says the proportion of the population of Brazil living in “favelas” or shantytowns was reduced 16 percent between 2000 and 2010.

In Brazil, a country of 192 million people, those that have escaped slum conditions annually over the last decade did so as a result of slum upgrading. Most of the families in this country who have left behind their status as slum dwellers actually stayed in the favelas, but with more services and urban infrastructure, or neighboring municipalities and the outskirts of cities.

Geographer Jailson de Souza, founder of the Observatorio de Favelas, a social organization that carries out research on Brazil’s shantytowns, and who is currently secretary of education in the Rio de Janeiro municipality of Nova Iguaçu, said the term “favela” is not necessarily synonymous with “slum.”

“U.N. experts might not consider some of our most populous neighbourhoods informal settlements or slums,” he said, citing La Rocinha in Rio de Janeiro, classified by some as a lower middle-class or working-class neighbourhood.

He said that what has been seen in Brazil is “a steady improvement in living conditions in the favelas, which does not mean a reduction in the number of people living in those areas.”

In fact, some of the country’s favelas have even expanded in size, such as those of Rio de Janeiro, the second-biggest Brazilian city after São Paulo to the south.

According to the Pereira Passos municipal institute, between 1999 and 2008, the surface area covered by favelas in Rio de Janeiro expanded by around three million square meters.

And the Brazilian Institute of Geography and Statistics (IBGE) reported that in 2008, one-third of Brazil’s 5,554 municipalities contained favelas.

But many of these neighborhoods experienced improvements, as a result of spending on housing by governments – which has increased although it has not kept up with demand – and of rising income and employment, which has “enabled workers to spend more on their homes and seek new housing alternatives,” de Souza said.

Today, the middle class absorbs more than 50 percent of total income in Brazil, compared to one-third in 1992, he pointed out. Between 2003 and 2008, some 32 million people experienced an improvement in their socioeconomic status, including 2.6 million who joined the consumers market for the first time, the economist said.

And according to the U.N. Habitat report, the number of Brazilians living in slums was reduced by 10.4 million people over the last decade, with the most significant improvement being seen in sanitation.

The report refers to certain socioeconomic policies that have been adopted and mentions the drop in the birth rate and in rural-to-urban migration in Brazil, although it notes that 54 million people still live in favelas.

Brazil Economy Update: Highest Industrial Output Since ’95

March 5, 2010

Brazil’s January industrial output data showed the strongest growth year-on-year for that month since 1995, signaling a continuing strong recovery.

Industrial output in January compared to January last year ramped up 16.0% higher, according to data from the Brazilian Census Bureau, or IBGE released Thursday.

IBGE said Brazil’s industrial production was now back to a level last seen in January 2008.
Analysts polled by the Estado news agency expected a 16.30% rise year-on-year with their forecasts ranging between 14.70% and 18.60%.

January’s 16% increase was the highest since 1995 when output leapt 16.9%, IBGE’s coordinator for industry, Andre Macedo said.

More indicative of Brazil’s recovery was January’s industrial output comparison with December, which rose 1.1%, exactly in line with market forecasts.

IBGE data showed an 8.6% leap in the production of consumer durables in January compared to December, but also a massive 36.4% increase on the year-on-year figure.

Capital goods production slipped 0.1% in the month-on-month comparison but was 12.8% higher on the year-ago month.

Within the capital goods segment, Brazil’s booming construction equipment sub-sector, was outstanding with a 202.6% expansion.

Brazil’s auto sector led the way in influencing January’s rise in industrial output, accounting for 41.4% of the overall figure.

According to IBGE amid other industries showing the best performance in January were metal products, up 12% and electrical and communications equipment, which jumped 14.3%.

Brazil’s January output rise followed two negative months of growth interrupting ten consecutive monthly increases.

January’s increase wiped out the impact of the two previous months’ negative performance, IBGE said in a statement.

During 2009 Brazil’s industrial growth declined 7.4% compared to a rise of 3.1% in 2008.

Brazil’s Real Skyrockets?

February 26, 2010

(and the GDP too?)

Brazil’s real is set for the biggest gain in the world this month as economic growth accelerates and the central bank prepares to raise benchmark borrowing costs to curb inflation.

The real rose 5.1 percent this month to 1.8038 per dollar as of 12:40 p.m. New York time, from 1.8950 on January 29. The advance, which reverses much of last month’s 7.9 percent plunge, is the largest among all currencies tracked by Bloomberg. The real will gain to 1.72 by year-end, according to the median forecast of analysts surveyed by Bloomberg.

“Brazil is still a solid story, and the real is an attractive currency,” said Vitali Meschoulam, an emerging- market strategist at Morgan Stanley in New York, who forecasts the real will rise to stronger than 1.7 this year. “The economy is the fastest growing in Latin America. It is among the first to raise interest rates and the strong foreign direct investment dynamics hasn’t changed.”

The real advanced as traders raise their bets that policy makers will boost the key borrowing costs from a record low of 8.75 percent as soon as next month to curb inflation. The central bank this week required lenders to deposit an additional 71 billion reais ($39 billion) to withdraw economic stimulus as a broader measure of inflation that includes wholesale prices quickened to the fastest in 19 months.

Interest Rates
Yields on interest rate future contracts due January 2011, the most traded on Sao Paulo’s BM&F exchange, increased two basis points, or 0.02 percentage point to 10.43 percent, up from 10.27 percent on Feb. 19. That rate suggests traders anticipate the central bank will push the benchmark rate to above 12 percent by year-end.

The real earlier rose as much as 1.4 percent to 1.7989, its strongest level since January 20 on a closing basis, as some investors in the currency futures market closed positions betting against the real.

The real’s gain this month pares its losses this year to 3.2 percent. The currency tumbled 8 percent in January in its biggest slump since October 2008 as China, the biggest buyer of Brazilian exports, curbed bank lending to slow the economy.

Goldman Sachs Group Inc. and Bank of America Corp. recommended clients this month buy the real, saying that growth in Latin America’s biggest economy will lure foreign investment.

Foreign Direct Investment
The $1.6 trillion economy will expand 5.5 percent this year, up from 0.5 percent growth last year, according to a central bank survey of about 100 economists published February 22.
Foreign direct investment will jump 73 percent to $45 billion, matching the record in 2008, as the country builds houses, roads and stadiums for the 2014 World Cup soccer games and 2016 Olympics.

Growth indicators suggest “the current account deficit will be easily financed through foreign investment,” said Jose Francisco de Lima Goncalves, chief economist at Banco Fator SA.
Brazil’s credit rating may be reviewed for an increase by Moody’s Investors Service next year if President Luiz Inacio Lula da Silva’s successor continues to improve the country’s debt indicators, the ratings company said yesterday.

Moody’s raised Brazil’s long-term debt rating to Baa3, the lowest investment grade, from Ba1 in September, following similar moves by Standard & Poor’s and Fitch Ratings a year earlier. Moody’s has a positive outlook on the rating.

Brazil Oil Update

February 12, 2010

Brazil OGX sees up to 900 million barrels in OGX-3 well

Brazilian oil start-up OGX (OGXP3.SA) said Wednesday it estimated recoverable oil reserves from its OGX-3 well at 500 million to 900 million barrels.

This is OGX’s second announcement of drilling tests from its offshore wells this week. On Monday, it said recoverable reserves from drilling at the OGX-4 well were seen at 100 million to 200 million barrels.

The OGX-3 well in the BM-C-41 concessionary block in the Campos basin off Rio de Janeiro’s coast has a productive potential of 3,000 barrels a day (bpd), the company said in a market filing.

The vertical well is depth reached 4,084 meters to carbonate rock layers. The sour to medium grade crude from the well is ranked at 19 to 20 degrees on the API scale.

For those in the oil industry looking to relocate to Brazil, contact Rent in Rio.

Brazil to Become Top Property Market

December 4, 2009

Brazil is set to become one of the hottest property markets of 2010. As one of the world’s fastest growing economies, Brazil has seen a large increase in Foreign Direct Investment. With the country set to host the 2014 football World Cup and 2016 Olympic Games, there will be improvements in infrastructure and huge growth in the construction industry.

Foreign investors are flocking to Brazil to view prime properties with world class views, snatching up real estate in anticipation of future capital growth.

Brazil Property Specialist, Colordarcy have seen Brazilian property enquiries increase by 60%, since the Olympic announcement. The company has responded by launching a consultancy service to help clients to source the best real estate deals in Rio de Janeiro.

Loxley McKenzie, Chief Executive at Colordarcy – is predicting an annual increase of 20% per year until 2016.

Mortgages will soon be available to international buyers and this will create a further boost to Brazil’s property market.

Investment banking firm Goldman Sachs believes that Brazil’s economic growth could outstrip that of the other BRIC (Brazil, Russia, India and China) nations over the next few years.

Brazil’s economy is widely expected to become the fifth largest in the world by the time the Olympic Games kicks off in 2016, and yet property and land prices still remain a fraction of those found in more developed nations.

The Brazilian president Luiz Inacio Lula da Silva has already pledged to spend up to £11.5bn ($17.4bn) on building a million new homes in Brazil between now and 2011.

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Brazil’s Unemployment Rate Continues to Drop

December 3, 2009

Brazil’s unemployment rate dipped again in October, this time returning to pre-crisis levels and hinting at a strong rebound ahead for Latin America’s biggest economy.

The jobless rate fell to 7.5% in October, the same as in October a year ago and slightly below forecasts, the Brazilian Census Bureau, or IBGE, said Thursday. Unemployment was 7.7% in September, down from 8.1% in August.

Jankiel Santos, an economist at Sao Paulo’s BES Investimentos fund, said October’s data reinforced the view that “labor market conditions remain quite favorable and should lend a hand to the Brazilian economy to keep on expanding in coming months.”

IBGE October data also showed average real incomes were 3.2% higher than October last year, indicating that the number at work enjoyed higher spending power and could thus more easily contribute to Brazil’s consumer boom.

Cimar Azevedo, IBGE director for employment data, pointed out that the average formal employment rate was 44.9% of the workforce in the January through October period, higher than the 44.4% level in the year-ago comparison.

October’s jobless rate declined for a third consecutive month, pointing to a steady rate of economic recovery, with better prospects ahead in the run-up to Christmas.

Roberto Padovani, chief Latin American strategist for WestLB Bank, predicted a strong rebound for Brazil in 2010, with economic growth reaching 4.8% after a 0.2% decline in 2009. “The expansion expected for next year will be fueled mainly by domestic consumption,” Padovani said.

November and December employment figures will likely be lifted significantly by the festive season, said Azevedo.

Last December the unemployment rate was just 6.8%.

But this year, significant tax breaks on consumer durables along with easier credit facilities and conditions should create even more work, especially in retail.

More employment opportunities are expected to be created in Rio with the upcoming influx of tourism expected to occur in the next few years due to the FIFA World Cup and the 2014 Olympics. Plans to improve upon existing venues and infrastructure as well as new constructions for these events will have a large effect on the economy.

The recent success of Brazilian oil and gas company OGX Petroleo e Gas Participacoes SA is also set to bring many more employment opportunities to the city.

Those looking to relocate to Rio to take advantage of these opportunities, or to book accommodations for any of the upcoming international events the city is set to host, contact Rent in Rio today.

Brazil to Reduce Carbon Emissions

November 20, 2009

Brazil’s President Luiz Inacio Lula da Silva announced Monday that he expects the leaders from the Asia-Pacific Economic Cooperation (APEC) to commit to a reduction of greenhouse gases.

In his weekly radio show, Lula expressed his worry on the matter of climate change and said that he expects the APEC leaders to advance on the discussions, in order to reach a proposal to be presented to the United Nations Climate Change Conference (COP-15), which will take place in December in Copenhagen.

President Lula noted Brazil’s commitment on the matter last week. The country announced its intention to commit to a reduction of 36.1 to 38.9 percent in its greenhouse gas emissions by 2020.

According to the government plan, about 20 percent of the reduction will originate from the reduction in the deforestation in the Amazon Rainforest region, while the other 20 percent will result from actions to protect the Brazilian savannah, to promote the use of green steel and biofuels and to increase energy efficiency.

President Lula said that Brazil’s commitment indicates that things are going well in the country, including a sign of economic growth and progress.

Brazil stocks ended higher Tuesday boosted by Ministry of Finance comments of higher and steady economic growth ahead. Brazil is also anticipating growth due to an influx of tourism to Rio de Janeiro. The city is making efforts to prepare the city for the Olympics and the World Cup, including making drastic changes to it’s transportation infrastructure.

Brazil’s benchmark Ibovespa stock index ended 1.17% higher at 67,405 points on the Brazilian Stock Exchange, its highest closing level since June last year.

Traded volume was a tad above average at 6.6 billion Brazilian reals ($3.84 billion).

Finance Minister Guido Mantega said Tuesday Brazil’s gross domestic product could grow steadily between 6% and 6.5% a year in the period 2010 through 2016, with investment jumping 13% to 15% next year, the Estado news agency reported.

Rio Business Update: Growth on the Horizon

November 12, 2009

Rio De Janeiro Has ‘Biggest Concentration Of Billion Dollars In Investment Per Square Kilometer’

investments by sectorA recent investment study by FIRJAN of Brazil’s Rio de Janeiro found that the area is about to experience a massive influx business investment, one that could rival any other place in the world in terms of dollars per square kilometer.

Although the Olympics will obviously make a large contribution to the economy, it is not the main investor. Reports show that Rio will be driven by Petrobas investment.

The New York Times states: An August 2009 study, “Decision: Rio Investments 2010-2012,” published by the Rio de Janeiro State Federation of Industries, predicted that public and private investment would pump $60.3 billion into the state over the next three years, not counting the additional $14.2 billion budgeted for the 2016 Olympic Games.

“I would dare to say that, probably, we have the biggest concentration of billion dollars in investment per square kilometer in the world,” said Cristiano Prado, the author of the industry federation’s study. “And more will come together with the Olympic Games in the next years.”

If you are relocating to Rio as a result of a business investment and the growing economy, contact Rent in Rio to make your transition to life in Rio a comfortable and enjoyable one and find you an apartment you love.

More Oil Off the Coast of Brazil

Brazilian oil and gas company OGX Petroleo e Gas Participacoes SA (OGXP3.BR) went three-for-three in its drilling campaign Thursday, with another well showing signs of hydrocarbons off Brazil’s coast.

The independent driller said that its 1-OGX-2-RJS well in the BM-C-41 block showed the presence of hydrocarbons. That was OGX’s third discovery since October, a stunning success rate for an oil company that was started from scratch in 2006.

“This new evidence of hydrocarbons confirms the existence of an active prolific system in this area, and contributes to a better understanding of the geological attributes of the region,” OGX CEO Paulo Mendonca said in a statement.

Thursday’s discovery was OGX’s second successful well drilled in the Campos Basin, where more than 85% of Brazil’s crude oil is produced. brazil_oil_platform_petroba

In October, the Ocean Ambassador rig was responsible for finding the Vesuvio prospect. Consultants earlier this week pegged recoverable reserves at Vesuvio to be about 1.4 billion barrels of oil equivalent.

Vesuvio lies in the BM-C-43 block, but at shallower depths. The Ocean Ambassador rig operated in 140 meters of water at Vesuvio but the final well depth was 2,347 meters.

OGX also holds a 100% stake in the BM-C-43 block.

Also in October, OGX said its first-ever well tested positive for hydrocarbons. The 1-MRK-2-SPS well, dubbed Abacate-1, is in the BM-S-29 block.

The BM-S-29 block lies in the promising Santos Basin, off the coast of Rio de Janeiro and Sao Paulo states. Nearby blocks have recently yielded discoveries that have increased positive expectations for OGX’s drilling.

OGX holds a 65% interest in the BM-S-29 block, with partner and block operator Maersk Oil do Brasil Ltda. holding the remaining 35%.

The company’s bright outlook has caused it to review previous plans with an eye toward accelerating its already aggressive drilling campaign.

Earlier this week, OGX CFO Marcelo Torres said that the company will drill 79 wells over the next four years, up from previous plans for 51 wells. In 2010, OGX will drill 27 wells. Some 26 wells will be drilled offshore, with a single onshore well planned for recently acquired concessions in the Parnaiba Basin.



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