Brazil

Brazil’s attraction for investors is a combination of market size, natural resources, growth potential, stable institutions, a democratic regime, and freedom from terrorism and religious and ethnic tensions. Within the country, a market of close to 100 million economically active consumers beckons. In addition, Brazil borders on 10 countries: Argentina, Bolivia, Colombia, French Guiana, Guiana, Paraguay, Peru, Suriname, Uruguay and Venezuela.

Recently, the Brazilian stock market was trading at record highs, reflecting investors’ growing confidence in the durability of the country’s economic recovery. Forecasters estimate the economy could grow by as much as 4.5% in 2004, and at a similar pace in 2005.

Economic output declined 0.2% in 2003 and President Luiz Inácio Lula da Silva has since been praised for his handling of the economy as foreign investment has risen, unemployment has fallen and inflation has been brought under control.

Although interest rates stand at a punitive 17.25%, inflation has fallen from 9% to 7% while exports are booming – particularly agricultural products. Brazil’s currency, the real, has been trading at its highest level against the dollar in more than two years.

FDI is expected to end 2004 at $17bn, and at $14bn in 2005.