AL. SANTOS 2300, 10th FLOOR
T + 55 11 3192 0600

Economic perspective for Brazil in 2018

 Denise de Pasqual

Economist with a degree from the University of São Paulo, postgraduate in economics from the financial sector by Fipe-USP and specialization in Graduate Management from FGV, she worked as a researcher at Fipe and Iesp (1992-1994). She is the Commercial Director of Tendências.

How would you draw now the economic situation in Brazil?

The recovery of the economy is under way, however, in a slower way than all the projections pointed out. Many factors contributed to this change in course, such as the political uncertainty and the paralysis of truck drivers that occurred throughout Brazil in the last month

What are the most promising markets and at what moment does the ceramic and construction industry gain relevance in this scenario?

The time is more favorable for the sectors with greater export capacity. The construction industry, undoubtedly, is one of those who fit into this profile.

Is it possible to draw a drawing on the construction marking in Brazil?
What would it be?

The Civil Construction market, as well as other sectors of the industry, goes through a moment of attention. We know that at the beginning of the year, the industry expectation of growth was 3%, but with the confidence factor weakened, this prognosis should not be fulfilled. It is not an alarming moment, demanding drastic situations, but it is a sector that depends precisely on this term (trust) to leverage.

The government says that Brazil comes out of its biggest economic crisis of recent times, what is its assessment? Are we really leaving the recession behind?

Yes, but slower than other recessionary processes. I say this because this is not the first economic recession our country faces, but it has undoubtedly been the longest period. The GDP growth forecast is 1.5%, that is, it is a low estimate compared to the recession we are experiencing.

What are the future scenarios when the subject is economics and politics in the current moment of Brazil?

We have the possibility of two scenarios ahead, both of which will impact the direction of the country's economy. Or someone who is elected and has a commitment to processes and agenda to solve the most immediate issues at the moment, such as budget deficits and low interest rates, for example. You need to be a person with great capacity for articulation and support and who can handle the necessary reforms. Otherwise, no scenario is favorable in relation to the country's economic growth.

High dollar, growing US economy, some emerging European countries. Which are the destinations of Brazil in the medium and long term, facing this international scenario?

If we look at this scenario in the short term we will see some optimism for the Brazilian economy, which is the export policy. With a positive global picture, sectors that invest and work to strengthen the practice of exporting their products can benefit as an alternative growth for the next two years.

On the other hand, in the medium and long term, we may see more protectionism, more countries closed to negotiations and a more fragile time for trade. What measures does Brazil have to take and the pains it has to face in order for growth to return forcefully?

Certainly for a resumption of economic growth, reforms must take place. The much-talked about pension reform is the key word for, for example, equalizing the fiscal deficit. Tax reform is also needed on issues such as simplifying taxes, reducing bureaucracy for business start-ups. And, along with this, the maintenance of economic policy reform.

And the electoral scenario, what movements do you foresee that the market will make with the possible winners of the electoral race?How will the market react to the election?

As already said, everything depends on the profile of who is elected and current polls still do not give a more concrete indication of the direction of these elections. The ideal scenario is the election of someone from the center-right who knows how to articulate positions and raise support for the definition and implementation of economically favorable reforms and projects. The next president will have to do a great job of deconstructing the image of the current government. What markets do not see with good eyes, are extremist policies, so the best of worlds would be the election of someone from the center-right, neither conservative nor too populist.


Please reload