Brazilian Economy Overview

Transcription

1 Brazilian Economy Overview DEREX Department of Trade and Foreign Affairs Mr.Antonio Fernando G.Bessa Deputy Director

2 1. Institutional. 2. Economic Highlights 3. Foreign Trade 4. Investments

3 Industry FIESP Federation of Industries of State of Sao Paulo Represents 131 sector business associations which stands for about 150,000 state and national firms CIESP Center of Industries of State of Sao Paulo 43 regional offices throughout the state which represents about 10,000 associated firms IRS Roberto Simonsen Institute Think tank specialized in industrial issues. It s also responsible for the coordination of Superior Council These entities work together in defense of the industry, providing services and support to their associated institutions and firms.

4 Education SESI Industrial Social Service SENAI Industrial Technical Schools Provides industrial employee s families with social services, mainly education, culture, sports and health Promotes professional education through technical schools providing qualified workforce to the industry 220 basic schools and more than 273,000 children, youth, adults and elderly people 157 technical schools and more than 1 million students registrations per year

5 FIESP Structure PRESIDENCY DEPARTMENTS SUPERIOR COUNCILS Guidelines for departments Agribusiness Competitiveness and Technology Construction Industry Defense Industry Environment Infrastructure and Energy Legal Division Regional Action Research and Economic Studies Small and Medium Companies Trade and Foreign Affairs Union and Labor Issues

6 Sao Paulo State and FIESP s representativeness in the Brazilian Economy Industrial GDP (US$ Billions) Main Industrial Sectors Represented by FIESP Aircraft Food Fuels Machinery Metallurgy Paper and Cellulose 700 Oil Refinery Electric Energy Chemical Products Oil and Gas Ethanol Textiles and Apparel 379 Fertilizer and Animal Food Vehicles and auto parts 100% 37% 69% SP State Share in Brazil s GDP and Exports 33% of Total GDP (*) US$ 709 bi Brazil São Paulo State Fiesp 24% of Total Exports (**) US$ 59.9 bi 57% of Brazil s Industrialized Exports (**) US$ 53.3 bi (*)2010, latest effective figure available (**)2012

7 Sao Paulo State and FIESP s representativeness in Brazilian Economy 2. Economic Highlights 3. Foreign Trade 4. Investments

8 * 2014* 2015* DEREX Department of Trade and Foreign Affairs Brazil s GDP Growth for the next 3 years is projected to be around 3,6% GDP average growth (%YoY) Average 4.0% Average 3.5% Note: (*) Forecast: BCB/Focus, Apr, 12 th, 2013 Source: IBGE

9 feb-07 jun-07 oct-07 feb-08 jun-08 oct-08 feb-09 jun-09 oct-09 feb-10 jun-10 oct-10 feb-11 jun-11 oct-11 feb-12 jun-12 oct-12 feb-13 DEREX Department of Trade and Foreign Affairs Despite the incentives adopted by the Government, the industrial production fell 2,7% in Industrial Production Index (02=100) seasonally adjusted Source: IBGE

10 In 2012, vehicle production fell 1.8%. Production of cars grew with IPI reduction, but the truck s production decreased 4,000 Production of vehicles Vehicles (1000 units) % YoY 16% 3,000 2,000 1,000 12% 8% 4% 0% Source: ANFAVEA -4%

11 The new light vehicle sales had been boosted by incentives granted by the Government in ,000 Production of vehicles by category Vehicles production Light vehicles Trucks Buses 1,000 units % YoY 3,500 40% 3,000 2,500 20% 2,000 0% 1,500-20% 1, % 0-60% % Source: ANFAVEA

12 feb-07 jun-07 oct-07 feb-08 jun-08 oct-08 feb-09 jun-09 oct-09 feb-10 jun-10 oct-10 feb-11 jun-11 oct-11 feb-12 jun-12 oct-12 feb-13 DEREX Department of Trade and Foreign Affairs Retail sales growth remains strong with an increase of 8.4% in 2012 Retail Sales Index (11=100) seasonally adjusted Source: BCB

13 feb-07 jun-07 oct-07 feb-08 jun-08 oct-08 feb-09 jun-09 oct-09 feb-10 jun-10 oct-10 feb-11 jun-11 oct-11 feb-12 jun-12 oct-12 feb-13 DEREX Department of Trade and Foreign Affairs Strong demand versus flat supply Industrial Production versus Retail Sales (jan/07=100)¹ Industrial Production Retail Sales Retail sales increased 8.4% in Industrial production fell 2.7% in 2012 Note: (¹) Index number, seasonally adjusted Source: IBGE, Macrodados

14 ...consistent credit expansion in Brazil, but Credit Expansion USD bn % Loans Loans % GDP 55, ,0 45,0 40, * 35,0 Note: (*) Preliminary data Source: BCB

15 206% 194% 187% 173% 135% 122% 116% 71% 65% 26% 17% 61% 55% 55% 51% DEREX Department of Trade and Foreign Affairs credit over GDP is still low compared to other economies Credit (% of GDP) - Selected Economies Source: World Bank

16 Tax burden (% of GDP) DEREX Department of Trade and Foreign Affairs The Brazilian tax burden is very high. Partners with similar ratio have a per capita GDP more than three times higher Tax burden x per capita GDP Per capita GDP (PPP) Source: IBGE, IMF, IMD, RFB Compilation: DECOMTEC/FIESP

17 In April 2012 public banks started to reduce lending rate boosting competition. This brought pressure on lending spreads, which began a declining trend Financial System Spread Total Individuals Companies Public banks lending rate reduction 5 feb-11 may-11 aug-11 nov-11 feb-12 may-12 aug-12 nov-12 feb-13 Source: BCB

18 4.9% 5.2% 5.2% 5.5% 5.8% 6.2% 6.3% 6.59% DEREX Department of Trade and Foreign Affairs Brazilian Monetary Authority promoted an aggressive monetary expansion Monetary Policy Consumer prices (IPCA): YoY Policy Rate (SELIC) 7.0% 6.5% 6.0% 10.50% 11% 10% 5.5% 9% 5.0% 4.5% 4.0% jan-12 mar-12 may-12 jul-12 sep-12 nov-12 jan-13 mar-13 8% 7.25% 7% Note: The Brazilian Central Bank increased the SELIC rate to 7.50% on April, 18 th, 2013 Source: BCB, IBGE

19 % 5.8% 7.4% 11.9% 9.0% 7.4% 5.6% 3.1% 4.4% 5.8% 4.2% 5.8% 6.3% 5.7% DEREX Department of Trade and Foreign Affairs Inflation remains within the bounds set by the government Inflation (IPCA YoY) IPCA inflation Target Upper/lower bounds Source: Brazilian Central Bank and the IMF Compilation: FIESP

20 several stimulus policies are in progress in response to the ongoing international crisis environment. Stimulus policy 1) Expansive monetary policy 2) Tax exemption for dynamic sectors (IPI) Automobile White line Building material 3) Fiscal and credit stimulus for Industry Brasil Maior 4) PAC equipamentos : anticipation of government purchases 5) Reduction in energy costs For consumers of medium and large (in the case of industries), the value can reach 32%.

21 Unemployment down in Brazil... Unemployment Rate - seasonally adjusted (% p.m) jan-12 mar-12 may-12 jul-12 sep-12 nov-12 jan Source: IBGE

22 Brazilian population is ageing. More than 47% is above 30 years old. Demographic composition (Million persons) Women Men 70-over years old years old years old years old years old years old years old years old 5-9 years old 0-4 years old Source: IBGE Development: FIESP

23 Around 30 million people have entered the middle class from 2003 to % 13 37% Social Class Mobility (% of total population and millions of people) 66 11% 50% % 31 Class A/ B 56% 113 Class C Class A/B more than US$ 2,790; Class C between US$ 648 2,790; Class D: between US$ % 47 24% 44 20% 40 Class D Class E: up to US$ 467; 28% 49 15% 29 8% * Class E Note: monthly per capita income per households and class, in prices of Note: (*) Forecast: CPS/FGV. Last effective data: 2009 Source: CPS/FGV

24 3. Foreign Trade 4. Investments

25 Trade flow follows a positive trend. In 2011, exports and imports reached highest historical level. USD bn Brazilian Trade Balance Exports Imports Balance USD bn * Forecast: FIESP Source: MDIC *YTD until march

26 Since 2008, commodities¹ represents the most part of Brazilian exports Brazilian exports composition (% of total) 80% 70% 60% 50% 40% 30% Commodities Non-Commodities 20% Note: (¹) Commodities represents primary products and semimanufactured goods Source: MDIC

27 Asia is Brazil s number 1 trade partner... Trade Balance: share by trade partner (2012) United States European Union Latin America Asia Others Source: MDIC

28 Top 5 destinations and origins of Brazilian exports and imports. Trade balance by destinations and origins (2012) Brazilian Exports USD bn % (2012 x 2011) Brazilian Imports USD mn % (2012 x 2011) 1º China 41,2-7,0% China 34,2 4,4% 2º USA 26,7 3,5% USA 32,4-4,7% 3º Argentina 18,0-20,7% Argentina 16,4-2,7% 4º Netherlands* 15,0 10,3% Germany 14,2-6,6% 5º Japan 8,0-16,0% South Korea 9,1-9,9% Note: (*) Main logistical hub of Europe Source: MDIC

29 Main primary products exports and imports... Main BASIC products (2012) Brazilian Exports Iron ores and concentrates USD mn Brazilian Imports USD mn Petroleum, crude Petroleum, crude Soybeans, whether or not broken Chicken Natural gas Coal, whether or powder, unagglomerated Soybean bran Wheat grains Rubber, in natura 662 Source: MDIC

30 ...main manufactured products exports and imports. Main MANUFACTURED products (2012) Brazilian Exports USD mn Brazilian Imports USD mn Airplanes Spare parts for vehicles Spare parts for vehicles Passenger car Passenger car Refined sugar Fuel oils Ethyl alcohol Medicines Electronic integrated circuits Source: MDIC

31 4. Investments

32 Consistent expansion of Foreign Direct Investment and International Reserves. FDI increased 110% from 2009 to 2012 in Brazil... Investment Inflow (USD mn) International Reserves Foreign Direct Investiment 400, , , , , , ,000 50,000 0 Forecast* BCB/Focus US$ 60 bn ,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Note: (*) Forecast: BCB/Focus, Apr, 12 th, 2013 Source: BCB

33 TOP 10 origins of direct investment in Brazil FDI in Brazil: share by country (2012) Country US$ Mil Share United States 12, % Netherlands* 12, % Luxembourg 5, % Switzerland 4, % Spain 2, % France 2, % Chile 2, % United Kingdom 1, % Canada 1, % Japan 1, % * Netherlands is an investment hub Source: BCB Development: FIESP

34 Production Exports DEREX Department of Trade and Foreign Affairs Brazil leads agribusiness production and exports globally for several products Brazil Leadership in World Ranking (2012/13) Orange Juice Sugar Broiler Coffee Beef Soy Complex Corn Pork 1st 1st 1st 1st 2nd 1st 2nd 4th 81% 45% 35% 28% 19% 31% 22% 9% 1st 1st 3rd 1st 2nd 2nd 3rd 4th 57% 22% 20% 37% 17% 24% 9% 3% Source: USDA (apr/2013) and DEAGRO FIESP

35 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13* DEREX Department of Trade and Foreign Affairs Brazil Production of grains Area (million ha): Production (million tons): 37% 217% Productivity (tons/ha): + 127% 3.5 Grains: cotton, peanuts, rice, oats, canola, rye, barley, beans, sunflower, castor beans, corn, soybeans, sorghum, wheat and triticale. Note: (*) Estimative Source: Conab (Apr/2013) and DEAGRO - FIESP.

36 Brazil stands out for the high share of renewable energy in its energy matrix than the BRICS and G7 countries... Renewable Energy Souces (% of energy supply) Brazil India Canada China South Africa Italy Germany France United States Japan United Kingdom Russia Source: Brazilian Ministry of Finance, Apr 2012 Economic Outlook Report.

37 Fifteen biggest Projects in the World s Energy Sector* (USD bn) China Brazil Brazil USA China Brazil Brazil China Canada Canada China Brazil India Colombia Brazil Jiuquan Eolic Platform Belo Monte Hydroelectric (PA) São Luiz do Tapajós Hydroelectric (PA) Green Power Express Transmission Yangjiang Nuclear Station 10.2 Santo Antônio Hydroelectric (RO) 10.0 Jirau Hydroelectric (RO) 8.2 Xiluodu Hydroelectric 6.8 Pace River Hydroelectric 6.6 Romaine Hydroelectric 6.5 Xiangjiaba Hydroelectric 6.3 Angra 3 Nuclear Station Mundra Thermoelectric 3.0 Pescadero Hydroelectric 2.5 Teles Pires Hydroelectric (MT-PA) Note: (*) Final stage or in progress Source: Brazilian Ministry of Finance, Apr 2012 Economic Outlook Report.

38 Thank you! Antonio Fernando G. Bessa Deputy Director 55 (11)