Time to tune in

Latin American companies turn up the volume on global growth

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Country Insights: Brazil highlights

EY - Jorge Menegassi

Jorge Menegassi
EY Brazil & South America

With growth still weak in most parts of the world and sluggish even in the key Asian growth markets, Latin America is looming larger now on the global business agenda.

Although the attention is new, most of the reasons for the resurgent interest are not. Abundant natural resources, growing consumer markets and a talented workforce have long made Latin American countries a destination of choice for mature-market multinationals. Beyond those advantages, another factor is making Latin markets even more attractive and more intimidating: the Latin American multinational.

Brazil has a growing roster of companies that have much more experience than their years in business might indicate. Over the years, Brazilian businesses have faced many challenges and crises:

  • Currency instability
  • Policy uncertainties
  • Tax issues
  • Volatile interest rates
  • Heavy competition

Thanks in part to the Brazilian multinationals’ performance, turbocharged by a succession of business-friendly governments, no Latin country has seen its global reputation climb as far and as fast as Brazil, which in just 20 years has emerged on the world stage not only because of its future promise but also for its present capabilities.

Whereas even 10 years ago, a conversation with a foreigner about Brazil would have to do with where Brazil was going and what it was like to do business there, today the questions are more likely to turn on what Brazilian companies are going to do next. They are a growing force in global business.

Fast facts: Brazil

  • Brazil is now the world’s sixth-largest economy, with a gross domestic product of US$2.47 trillion. Only the United States, China, Japan, Germany and France are larger. (”Brazil becomes sixth biggest economy,” Financial Times, 6 March 2012)
  • Brazil’s domestic market is bigger than that of Mexico, Argentina, Colombia, Chile and Peru combined. (Oxford Economics)
  • Fifty-three percent of Brazilians — 104 million — are now middle class. (Brazil Presidential Office of Strategic Affairs study, September 2012)
  • Yet Brazil has some catching up to do. Its GDP per capita is US$10,299 in purchasing power parity terms, according to Oxford Economics, significantly less than that of Chile (US$16,019), Argentina (US$15,629) and Mexico (US$13,095).
  • Brazil ranks in the bottom third on the EY 2012 Globalization Index, which measures the top 60 countries by GDP in terms of their openness to trade capital flows, exchange of technology and ideas, labor movements, and cultural integration.(Looking beyond the obvious, EY, 2012)

For more information

EY - Brazil Download the Brazil highlights report here.