Reports from the International Monetary Fund and international private consultants show that at the end of the year Brazil’s GDP will rank sixth in the world and for the first time ahead of Britain’s GDP.
Brazil’s GDP is expected to grow 3.5% in 2011, less than originally expected by the government last January, but it will total US$ 2.44 trillion, enough to surpass the US$ 2.41 trillion from the United Kingdom.
The report was published by daily Folha de S. Paulo based on IMF data and the EIU, Economist Intelligence Unit and BMI, Business Monitor International.
“The fact that the Brazilian economy is overtaking that of the developed countries reflects the effects of the access of large segments of the poor population into the middle class and the consumer market,” said Robert Wood, a US analyst.
If the growth tendency in Brazil is confirmed in the coming years it is possible that it can overtake all European continent.
Brazil to surpass UK and Become World’s Sixth Economy by 2012
Posted by Pioneer Land Group in Uncategorized.
Sao Goncalo Airport bid in August
Posted by Pioneer Land Group in Natal airport, Tourism.
Right to the construction and 25 years of operation management of north-east Brazil’s largest airport will be decided on the 22nd August in an auction style bid. This is the first of several major new airports to be handed over to a private constructor and operator in response to a rapidly growing demand for more domestic and international flights to Brazil.
Air travel itself grew by 23% y-o-y in the past 12 months which, further supported by the enormous traffic expected with the coming FIFA World Cup and Olympics, is putting an enormous strain on airports and carriers in Brazil. Natal is one of the FiFA World Cup cities and so the Sao Goncalo do Amarante airport will be constructed and opened well in time for 2014, further driving tourism and visitors to Brazil’s most untouched region.
For further details read here.
50m new Brazilian consumers
Posted by Pioneer Land Group in Economy.
The number of middle and higher class citizens in Brazil has increased by more than 50m people since 2003. Since January 2009 alone, according to a study by FGV the top of the social pyramid grew 12.8% and the middle class (C) grew 11.1%, reaching a total of over 100m alone now living with middle class standards.
Importantly however, unlike inflationary growth in ‘developed’ countries that was experienced during the previous decade, Brazil’s growth is not based on increased debt. Stable inflation coupled with economic growth and wage increases have resulted in steady and sustainable growth.
Importantly for Brazil real estate investment, this will not result in a Brazil real estate bubble as still less than 5% of real estate value is mortgaged. For the detailed story click here.
Brazil lowest ever unemployment
Posted by Pioneer Land Group in Economy.
May 2011, Brazil’s unemployment rate falls to the lowest rate ever, whilst the rest of the developed world struggles on. The jobless rate fell to 6.4 percent in May, the lowest since statistics began in 2002.
As Latin America’s biggest economy continues to hire more and more workers to meet growing domestic demand, average real wages also rose – by 4 percent year-on-year to 1,567 Reais (US$988) per month.
Record low unemployment coupled with a “substantial” increase in wages are an “important risk” for inflation and a driver of economic growth, central bank policy makes stated in their June board meeting.
For the full story on economic growth and control, visit Bloomberg.
Brazil super yacht market growing
Posted by Pioneer Land Group in Tourism.
As mentioned in the Financial Times this week, the Italian luxury yacht builder Ferretti is turning to the new super rich of Brazil to increase sales by up to 15 per cent annually during the next three to four years.
The CEO of Ferretti told the FT that due to Brazil’s love for yachting, the hundreds of harbours and yachting clubs, its 7400km of stunning coastline and the year round warm weather, Brazil was a natural market to focus on. With Brazil’s rapidly growing economy the yachts are now more affordable to Brazilians then traditional markets.
According to Dasein Executive headhunters, chief executives and directors in Sao Paulo earnt more than in London and New York last year.
$47bn set aside for Brazil housing
Posted by Pioneer Land Group in Real Estate.
Last week the Brazil government confirmed its financial strength and stability by announcing over $47bn dedicated to housing construction loans over the next 3 years. With a housing deficit of around 9m units, these affordable houses are desperately needed and cater to the middle class market with properties valued between US$30,000 and US$80,000. Instigated via the government’s “My House My Life” program this effective real estate construction boom is fuelling strong growth amongst numerous Brazilian developers, in turn increasing private equity and FDI (Foreign Direct Investment) in to Brazil, further strengthening the economy.
Considering the increasing consumer wealth it is not only residential real estate that is receiving interest from overseas investors, but a rapid boom is occurring with commercial space including shopping malls that have produced some of the best results for various investment houses over the past few years.
A country with such extensive natural resources, and deep pockets of cash savings, Brazil’s future seems very bright indeed.
Natal’s new airport construction bid
Posted by Pioneer Land Group in Natal airport.
Dilma Rousseff, Brazil’s president, is putting construction of the new Natal airport up for auction. The successful bid will have up to a maximum of 3 years to complete the airport (crucially in time for the World Cup 2014) and then will also have management rights for 25 years. Tender’s will be accepted by the end of June 2011 in order to ensure timely delivery of the north-east of Brazil’s largest airport which will take over from Augusto Severo, currently stretched to capacity.
Bloomberg story here.
Brazil mortgage market 51% growth
Posted by Pioneer Land Group in Real Estate.
Crucial to the growth of any real estate market is the influx of credit. In our “developed” markets we know this only too well following rapid price growth and crash at the hands of over-zealous banks in the last decade. With high gearing ratios still in place price / funding sensitivity is still very high and the market still nervous.
Now imagine a different market; where values are real, prices tangible, where banks have funded only a tiny percentage of the total market value, where the price is effectively the cash price and where you know the price is determined by pure market demand and supply and local affordability. That market is Brazil.
In 2010 Brazil mortgage debt was only 4% of GDP, compared to around 70% in the US and most of Europe, resulting in a stable market with prices relatively insensitive to funding. With a shortage of 9.1m homes and a wealth of cash reserves the Brazil government can afford to slowly, carefully, inject cash in to the system, helping those that want to own their own residence and probably having a minimal effect of raising prices. As such the government has the goal to reach 11% of GDP as mortgage debt by 2014.
Luiz Antonio Franca the President of ABECIP (Brazilian Association of Savings and Loans) stated that 2010 was the best year in the history of the real estate market for Brazil; in 2010 housing mortgage debt reached R$ 56.2bn, outstripping figures registered in 2009 of R$ 34.0 billion, and in absolute terms the number of signings made by agents of SBPE (Brazilian Savings and Loans) amounted to 421,400 units, a 39% increase over 2009.
As of today the total number of units financed has now reached 1.052m, an increase of 57% over 2009, but still an incredibly low number when you consider the country’s population of 290m people. In 2011 ABECIP forecast that mortgages will grow 51% to reach R$ 85 billion and there should be 540,000 new mortgage units funded.
Full article here.
9.1m Brazil families need real estate
Posted by Pioneer Land Group in Real Estate.
National real estate prices are being driven upwards in Brazil supported by an enormous internal demand from middle class families.
According to a recent survey carried out by the Data Popular Institute there are now 9.1 million Brazilian families in Brazil that plan to buy real estate in Brazil over the next 12 months. These families are termed as “middle class” meaning that they have between 3 to 10 times the minimum salary. They are one of the world’s fastest growing middle classes and are the engine behind increased consumer spending and the high demand for homes in Brazil.
This huge increase in the number of middle class families with increased spending power is due to several factors such as the increase in salaries, wider availability of credit and also better education, all a result of the booming Brazilian economy.
For the first time ever Brazil’s middle classes can now acquire mortgages, never previously available, and these are offered at reduced rates to qualifying families so monthly mortgage payments are invariably cheaper than rent.
Brazil record economic growth 7.5% in 2010
Posted by Pioneer Land Group in Economy.
Brazil’s economy grew by 7.5% in 2010, the fastest since 1986 and the 3rd largest in the world behind China and India.
Overall the economy grew 7.5% with gross domestic product (GDP) of Latin America’s biggest economy reaching 3.67 trillion Reais (US$2.21 trillion), according to figures released by the Brazilian Institute of Geography and Statistics (IBGE).
The IBGE attribute the high growth rate to the increase of domestic demands in the country, with industry (expanding 10.1%) being the highest growth sector.
Brazil’s economic growth surpassed countries such as South Korea, Japan, Germany and the United States and also exceeded the 5% world average GDP growth.
Natal’s new airport “Question of Honour”
Posted by Pioneer Land Group in Natal airport.
It’s now back to business in Brazil after another traditionally wild carnival season and we have exciting news about the new airport Sao Goncalo do Amarante, which President Dilma described as “a question of honour” on her recent visit here (Tribuna do Norte 10th February 2011).
The next day, the local newspaper confirmed that the tender for contract will go out in April. Furthermore, the governor of Natal, Rosalba Ciarlini, “was guaranteed that the Airport of Sao Goncalo do Amarantes is a priority for the Planalto Palace”.
Of course the World Cup is getting closer and closer and Natal needs to get to work! “FIFA confirmed Natal as one of the elected cities for the 2014 World Cup, in spite of delays in the project and the start of the works” (Tribuna do Norte 24th February 2011).
President Lula signs decree for Natal’s new International Airport
Posted by Pioneer Land Group in Natal airport.
Brazil’s President Luiz Inacio Lula da Silva has signed a decree allowing the privatization of Rio Grande do Norte state’s Sao Gonçalo de Amarante airport. The tender is expected to be worth some 1bn Reais (US$544mn), news service Agencia Estado reported.
The first phase of construction is budgeted at around 800mn Reais and should wrap up by 2012. The airport has already received 105mn Reais in federal funding through the country’s growth acceleration plan (PAC). About 90% of earthworks, 10% of drainage and 25% of paving works have already been completed, and the federal government will invest about 155mn Reais by year-end to complete these works. However, the airport’s runways, take-off and taxiing lanes have yet to be built.
Scheduled to open in 2013, prior to Natal hosts the 2014 FIFA World Cup, Sao Gonçalo airport will be the largest airport terminal in Latin America and the 7th largest in the world, with capacity to handle 5mn passengers/year.
Brazil is booming like the “US in the 1950s”
Posted by Pioneer Land Group in Economy.
Brazil is booming and brimming with business opportunities, “like the US in the 1950s”, billionaire businessman Sam Zell told CNBC Wednesday. He said if Brazil continues on the same course, he predicts that the “fiscally conservative” nation will soon be CNBC Full Story:one of the top two countries in terms of growth.
The real estate tycoon said Brazil has 8 % debt, compared to 70 %(of GDP) in the US. The country has a AAA rating from several major credit-rating institutions.
Brazil purchasing power in NY increases US-Brazil flight routes
Posted by Pioneer Land Group in Tourism.
The number of Brazilian tourists who travelled to New York increased 41% to 359,000 last year from 2007, making visitors from Brazil the eighth-largest group arriving in the city. Demand is so strong for travel to New York that American Airlines is adding 11 flights a week between the U.S. and Brazil beginning November 18th, the Texas-based air carrier said in a statement on June 24th.
In the country of more than 193 million people, Brazil now has more billionaires than any nation in Latin America according to Forbes magazine, whilst the number of millionaires jumped 19% to 126,882 from 2008 to 2009, according to Boston Consulting Group data. Gross disposable income in Brazil advanced 54.3% from the time President Luiz Inacio Lula da Silva took office in January 2003, the national statistics agency said in an e-mail statement July 16th.
The Brazilian Real has also rallied 100% against the dollar since 2003 and jumped 33% in 2009 alone; the best-performing currency in the world; helped by revenue from exports of commodities such as coffee and soybeans and demand for the nation’s stocks and bonds.
First quarter economic growth of 9%, the fastest since 1995, was driven by consumer spending, as retail sales climbed 15.7% in March from a year earlier, the most since at least 2001. Gross domestic product will expand 7.2% in 2010, the quickest pace in more than two decades, according to a central bank survey of about 100 economists published July 19.
For the full story please visit Bloomberg.
Brazil hotel revenue increases 15% y-o-y and average hotel occupancy now over 70%
Posted by Pioneer Land Group in Resorts.
Following recent news from the IMF that they have readjusted their forecast higher for Brazil’s growth in 2010, now 5.5%, it seems the economists are proved right and Brazil is set for a number of prosperous years of economic growth ahead.
For Pioneer Land Group our interest is the luxury hotel industry specifically, and this week we received more good news as leading independent global hotel analysts STR Global announced the Brazil’s hotel industry is going from strength to strength. Official data released shows Brazil average hotel revenue has grown over 15% year-on-year over the past 12 months, and currently averages over 70% occupancy across its hotel industry (over 10% higher occupancy than any other country in North or South America).
As Natal Ocean Club Resort & Spa prepares to become Brazil’s flagship luxury resort under experienced management from the Preferred Hotel Group, it is pleasing to know that large numbers of visitors from around the world will soon come to explore this beautiful area and delight in the luxurious Natal Ocean Club. For full details on the hotel figures released please click here.
