Archive for the ‘Economy’ Category

President Lula signs decree for Natal’s new International Airport

Posted by Pioneer Land Group in Economy, Tourism.

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 launched in H2, and will 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, 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.

Natal is one of the host cities for the 2014 World Cup.

Business News America full article

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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 one of the top two countries in terms of growth.
CNBC Full Story:

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IMF raises Brazil growth forecast to 5.5% for 2010

Posted by Pioneer Land Group in Economy.

Due to the combination of strong domestic and external demand, strong macroeconomic fundamentals and higher commodity prices, the International Monetary Fund this week raised its growth forecast for Brazil in 2010 to an impressive 5.5%. With unequalled high levels of Foreign Direct Investment and also increasing domestic consumption, Brazil has a unique global economic strength in 2010 with growth rates only paralleled by recognised giants India and China (and without many of their problems). For further details visit Bloomberg.

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Brazil to be 5th largest economy within a decade!

Posted by Pioneer Land Group in Economy.

Whilst the rest of the World struggles with what seems an unavoidable whirlpool of economic decent, Brazil’s story is a sharp contrast. With countries such as Spain suffering unprecedented unemployment levels around 15%, Brazil’s economic strength and stability has been proven with over 1m jobs created in 2009.

The final figures should range from 1.1m according to Labor Minister Carlos Lupi up to 1.3m if President Lula da Silva’s forecast is right. With a population of 190m this is not an enormous percentage increase, however for a country with a lower base salary and standard of living, these figures bring much needed help. More than the economic ripple throughout Brazil, these figures also bolster the growing confidence of a country that is now realising its full potential.

“Brazil is going through a magical moment in its economic life” Lula said, “At a time when the world is facing unemployment, we created 1.3m new jobs this year of crisis”. Lula was attending an event with automobile manufacturer Ford to unveil their investment in the country’s northeastern state of Bahia.

Brazil Taking off

As the world’s 5th largest landmass, one rich in natural resources from oil to minerals to biofuel crops, with new offshore oilfields recently discovered and increasing mineral demand from Asia, Brazil’s economic growth has already returned to an annualised rate of 5% of GDP. Along with established manufacturing industries from aircraft to mobile phone manufacture, Labor Minister Lupi expects to create a further 2m jobs in 2010.

When Brazil’s growth rates, resources and economic stability are compared to the collapsing developed economies it is evident that Brazil’s meteoric rise will occur far sooner than predicted. Goldman Sachs originally forecast that Brazil would become a major player around 2040, according to growth rates in 2001. What a change 18 months can make. Unless France and Britain can pull themselves out of their current spiral, and sort some serious fundamental economic challenges ahead, then Brazil will be recognised as one of the most powerful countries within the decade. Watch this space.

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BRIC’s on the move

Posted by Pioneer Land Group in Economy.

First coined in 2001 by Goldman Sachs, BRIC was the collective given to the group of countries – Brazil, Russia, India and China. The investment bank argued in a thesis entitled Dreaming with BRIC’S: The path to 2050 that by the year 2050 the combined gross domestic product of these 4 countries will surpass the product of the elite G7 group of the US, Japan, Germany, Britain, Canada and Italy. The term has stuck and whether this theory is acknowledged by all is neither here nor there, because the figures can’t hide the truth. The BRIC economies are catching and they are catching fast, furthermore the current financial crisis has only strengthened the position of these emerging markets. As the rest of the world’s economies shrink China is expected to expand by 6% this year and India 4.5%,.

This has led the chief economist at Goldman Sachs and the original author of the thesis to revise his theory and predict that the BRIC economies will surpass the G7’s efforts by 2027, as little as 18 years time.  This is almost half the original prediction and it would come as no surprise were this to be revised again.

Perhaps of more significance though is the inaugural summit of the BRIC leaders in the Russian city of Yekaterinburg. It will be the first time in history the leaders of these emerging powers will assemble for talks and the implications to the rest of the global economy are far reaching. The momentum of this group is gathering pace all the time, and this is the clearest signal yet that this group of nations are able to look after themselves and solve their issues separately with out the help of the G7.

Ref: BRIC nations gather for inaugural summit

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Arabian Investors in the market for Brazilian Real Estate.

Posted by Pioneer Land Group in Economy, Real Estate.

Sotheby’s International is preparing a special portfolio of property for wealthy Arabian investors keen to take advantage of strong yields in a relatively unexposed international market. The Director of Sotheby’s in Brazil, Mr. Fabio Rossi will present the selection to groups of investors from the United Arab Emirates, Qatar and Bahrain looking at commercial real estate, farms, and hotel and tourist enterprises.

In an article for www.brazzilmag.com Mr. Rossi explained that “The return of commercial real estate in Brazil ranged from 0.8% to 1% per month”, this is against a backdrop of a global average of 3% to 4% per year. The Arabian investors have shown a keen interest in the tourism and hotels market and are particularly curious to the affects the world cup in 2014 will have on the segment. With 5 groups playing a strong hand in discussions it is believed they will look to invest some $50million each, and with 3 of the groups keen to partner with Brazilian companies, it could get very competitive come September.

Mr. Rossi goes on to say that Brazil, out of the BRIC economies has now become the number one target destination for Arabian investment. Yet the market still remains in its infancy, foreign investment into Brazilian real estate is 5% of the total compared to a global average of around 30% to 40%.

Ref: Arab Investors looking for productive land in Brazil

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Build it and the planes will come

Posted by Pioneer Land Group in Economy.

In a further boost to property owners in Brazil and those looking to visit on holiday, the National Civil Aviation Authority (ANAC) has recently granted permission for two new airlines to become operational by the end of this year. The announcement by Agencia Brasil will be seen as welcome news to the aviation industry as the continued passenger traffic growth and strong economic performance has meant the current demand on existing airlines has started to strain resources.

With the economy forecast to continuing growing at 4% over the next 20 years and a tourism industry that has seen a fivefold increase in international arrivals over the past 15 years, there is a very real need to increase the availability of domestic flights in Brazil. This giant country is home to 31 per cent of all Latin America’s GDP and is a major hub for transport in South America and beyond.

The two new airlines Sol Linhas Aereas and Nordeste Aviaco Regional Linhas Aereas have both recently been given a licence to schedule flights within Brasil and now await permission before they can start operating.

In further positive news American Airlines and GOL Airlines intend to sign a code share deal, which will see an increase in availability and variety of routes between the states and Brazil, a great boost for all those thinking of investing in the Brazil from the US.

To read about this story in more depth please visit: http://www.estatesbrazil.com/2009/09/new-low-cost-airlines-in-brazil-to.html

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Brazil’s economic recovery to outshine others.

Posted by Pioneer Land Group in Economy, Tourism.

Analysts have lent weight to Brazil’s market confidence with the opinion that securing the Olympic vote is likely to see the country outshine many others in its economic recovery.

Although the actual event only lasts for two weeks, the knock on effect in other sectors is estimated to be huge. Thousands of international and domestic investors will be tracking and monitoring progress over the next 8 years and analysts predict that the economy could stand to benefit from over $17billion in new spending the aforementioned time period, and a staggering $50billion in long term economic contributions.

In a paper produced by Credit Suisse,  the impact of the games on the host regions will echo far after the games have finished, urban development is likely to increase as is increased media exposure. They go on to say that the main players to benefit from the games will be the construction and tourism industry.

Expenditure on infrastructure alone will be a dizzying levels. In an article by Carla Mozee for Marketwatch.com, she interviewed Jack Dzierwa, a strategist at U.S. Global Investors who said “What you need is better roads, better hotels, better communications-infrastructure, food services…You’re not just building stadiums; you need to support these stadiums. It’s an all-encompassing project.”

Dzierwa highlights how Brazil is positioning itself as South America’s engine of growth, this Olympic vote was proceeded by news last month that Brazil was one of the first country’s in the region to pull itself out of recession, growing at a healthy 1.9% in the second quarter. This followed an announcement form Moody’s Investment Service that they had upgraded Brazil to investment level, meaning the country sat at investment grade with all 3 major rating agencies. Finally money has been pouring into the BM&F Bovespa as it has been home to two of the largest IPO’s globally so far this year.

Special thanks to Carla Mozee for Marketwatch.com – To read more on this story please visit Olympics in Rio may be a boon to Gerdau, Gafisa, Vivo

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Santander look to Brazil

Posted by Pioneer Land Group in Economy.

Santander, Europe’s largest bank and one of the few to of come out of the global financial crisis in a relatively healthy state, have announced an Initial Public Offering (IPO) believed to be in the region of $7.2 billion dollars for the Brazilian arm of their operation; Banco Santander Brasil. Already its largest division in Latin America, this move is seen by analysts as a firm indication of the possible growth opportunities the bank believes exist in Brazil.

With a presence in Sao Paulo going back over 25 years, Banco Santander Brasil is currently Brazil’s 3rd largest bank, yet globally it is one of Santander’s most important headquarters accounting for 20% total profit for the group. This IPO on the BM&F Bovespa will be the largest offering made in the stock exchanges history, and globally the second largest of 2009. 525 million units will be sold at a range of 22 reais to 25 reais, an offering equivalent to 16.2% of Banco Santander Brasil’s current value.

Currently, the bank operate on all segments of the financial markets, with 3,600 branches across Brazil serving over 9 million customers. A further 400 branches are expected to open should the offering be successful with $1.5 billion due to be invested into expansion. The chairman of the group, Emilio Botin outlined his plans to make Santander become Brazil’s biggest non-government lender.

With far-reaching implications for private lending, it is seen as welcome and timely news for real estate investors within Brazil. Currently the mortgage market in Brazil accounts for approximately 3% of GDP, a figure which has seen the market remain stable over the duration of the global banking crisis. However, the economy has now pulled itself out of the recession and confidence is surging back to investors. The mortgage market in Brazil is still in its infancy, but with such a large offering made by Santander, it may only be a matter of time until we see some maturity.

For further information on this article please visit: Banco Santander Brazil Gets Ready for Largest IPO in 2009

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Brazil 2016 Olympics

Posted by Pioneer Land Group in Economy, Tourism.

Congratulations to Brazil for winning the bid to host the 2016 Olympics! As the country says farewell to football fans around the world in 2014, just two years later a new influx of sporting professionals will be making their way to Rio de Janeiro for the 31st Olympic Games. A remarkable achievement for the south American city considering they bid against Chicago, Tokyo and Madrid and this is further evidence of the giant strides the country is making under the leadership of President Lula. During his acceptance speech the rightfully proud President stated “I confess to you if I die right now my life would have been worth it”. And he may be right, the effects on the economy of hosting the Olympic games cannot be underestimated.

Investment into infrastructure will take place on unprecedented scales, as transport and communication lines are upgraded to leave a lasting legacy, long after the final Olympian has returned home. A major event like this puts the country firmly on the global radar, the influx of foreign arrivals is likely to increase by the thousands and for those that enjoyed themselves, they are likely to want to come again giving a boost to the hotels and tourism industry. Crime is also predicted to fall as the city comes under increased scrutiny from the world’s media and the Olympic Committee. Finally, a large increase in foreign direct investment (FDI) especially in construction will create thousands of jobs from as early as next year. The knock on effects for the economy are going to be huge.

So congratulations to Rio de Janeiro and President Lula for securing the vote, the next decade in Brazil is certainly going to so very exciting, and if you like sport then you don’t need to think about anywhere else!

The Olympics in Rio

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