Pioneer Land Group Blog

The largest developing economies in the World are rebounding from recession much faster than the developed economies. Indeed for the BRIC this credit crunch has been more of a milestone than a recession, a point in time when the power shift occurred even more rapidly than ever. Whilst western economies continue to struggle, India and China both grew 6% y-o-y to March 09, and Brazil has rapidly regained ground and hopes to post a 4% growth by end 09. Of the BRIC, only Russia has felt the economic shock on a scale even worse than the US, a vast 9% due mainly to its dependency on oil.

So, Russia aside, the “big future three” seem to be getting along fine and seem content to work together and with other developing nations to achieve their goals. China is buying millions of acres of farmland in Africa and South-East Asia, and has overtaken America as Brazil’s largest export market, the latter being incredibly good news for Brazil, who is also now the largest exporter to India. China is using $2trn of its foreign reserves to invest in other emerging markets, an example of which is $10bn going in to Petrobas, Brazil’s state-run oil company.

Importantly Brazil is still not too dependent upon its exports, accounting for only 15% of its GDP … much smaller than developed economies. Investors should look for ways in to Brazil, India and China as their economies rebound and will catch up very fast over the coming decade.

For the full story read The Economist.

Brazil’s economy is in a strong position to weather the financial crisis and will grow above the global average this year, Brazil’s Central Bank President Henrique Meirelles said on Sunday. ”We are in the process of reviewing our forecast but our estimate is that we will grow above the global average,” Meirelles told journalists during a meeting of Ibero-American finance officials in Portugal. He said Brazil’s economy was in a strong financial position, with $200 billion in net foreign reserves. “This will allow the country to face scarcity of international finance,” he said.

The government has said Brazil would grow 4% this year while economists think it may be closer to 1.5%. ”Brazil is confronting this crisis in a better position than in the past and more advantaged than many other regions of the world,” he said. Brazil was growing strongly but has been hit by the financial crisis as it experienced a sharp fall in the commodities it sells to the world. Meirelles said domestic demand continued to grow.

Full report from Reuters.