Brazilian Trade and Investment Promotion Agency Apex-Brasil Brazil Economic Scenario and Investment Opportunities Alessandro Teixeira President.

Brazilian Trade and Investment Promotion Agency

Apex-Brasil

Brazil Economic Scenario and

Investment Opportunities

Alessandro TeixeiraPresident

Regions FDI Share of FDI inflows in selected regions

Latin America’s FDI inflows: Brazilian share

FDI in World

World Trade Trends

World Trade Flow – acceleration from 2002 onwards

World Trade Trends

World Exports

1999 2007

World Trade Trends

World Exports – BRICs Growth

1999 2007

World Trade Trends

World Imports

1999 2007

World Trade Trends

World Imports – BRICs Growth

1999 2007

Brazilian new cycle of economic growth

High rates of economic growth:– GDP– Consumption– Investment

Balanced growth;

Based on foreign trade and mass consumption;

Reduction of social and regional inequalities;

Sustainable Growth

Sustainable growth

Low external vulnerability:

New foreign policy – diversifying trade partners

Trade surplus (US$ 25 billion – 2008)

Current transactions surplus (US$ 3.6 billion - 2007)

International reserves (US$ 190 billion - 2007)

The country became a net foreign creditor (January 2008)

Trade flow

Source: MDIC

US$ 198 bi

US$ 173 bi

US$ 25 bi

Mass consumption – A new middle class appears Growth of the population’s consumption capacity

Expansion of employment and incomeIncrease on minimum wageCredit revolutionNew social programsInflation under control

Income Class

2002: C = 32% 2007: C = 49%

Source: DATAFOLHA

Employment Rate In Brazil, from 2004 to 2007, 1.41 million new

jobs were created each year on average

Family income

+10.1%+8.8%

+7.9%

* forecast

R$ billion

Source: IBGE

Family consumptionQuarterly growth over the past year’s same quarter

13.6%

Sales in commerce In 2007: 9.68% growth over 2006

Apr 2008: 10.26% growth – 12 month accumulated

Source: IBGE

Brazil – International ReservesUS$ billion

206,4

59,8

30

50

70

90

110

130

150

170

190

210

230

nov05

fev06

mai06

ago06

nov06

fev07

mai07

ago07

nov07

fev08

mai08

ago08

nov08

Fluctuation between mar/06 and nov/08: 146,6 billions

Pay off IMF debts

Mar/06

Nov/08 *

Source: Brazilian Central Bank

* Forecast

GDP growth in Brazil

2,7

1,1

5,75,0

4,0

5,05,4

3,2

4,0

-

1

2

3

4

5

6

7

2002 2003 2004 2005 2006 2007 2008 2009 2010

PAC GDP Growth Forecast 2008-10

PAC

Sources: IBGE, MF/SPE

* Forecast

GDP growth in Brazil

GDP growth – first semester, 2008/2007: 6.0%

Brazil - FDI inflowsUS$ billion

2007: inflows = US$ 34.3 billion

99% growth over 2006

Source: Unctad

Brazil and the international crisis

Brazil is now much less vulnerable to external crisis in comparison to the past years:

Soundness of external accounts;Fiscal balance and public debt reduction Inflation under controlGrowth sustained by domestic demand

Even though Brazil is not immune to crisis, impacts are limited.

Foreign confidence in Brazil This year, Standart & Poor’s raised its rating on

Brazil to Investment grade.

“Lowering inflation, a stable political situation and a raft of interesting mid and small- cap companies is driving increased investor interest in Brazil - making it one of the more attractive emerging markets for 2008.”

“There has been a lot of money flowing into Brazil in recent years and an increased demand for stocks. In terms of the growth and opportunities available, Brazil is an interesting country for investment.”

Financial Times – Feb 26, 2008

USA-Brazil TradeUSA is Brazil’s main trade partner:

– 14 % of Brazilian exports went to USA in 2008– 14,9 % of Brazilian imports came from USA in

2008

USA-Brazil Trade Flow

Investment Opportunities

Aeronautics

Biotechnology

ICT

Infra-structure (“PAC” and PPP)

Tourism and Real State

Biofuels

Oil and Gas

Main Sectors:

PAC – Growth Acceleration ProgramLarge investments being made in infrastructure:

Highways Energy Transportation

Raise productivity

Boost economic expansion and job creation

Stimulate private investment

Housing Urbanization and sanitation Oil & Gas

PAC – Growth Acceleration Program Facts and figures

US$249 billion of investments from 2007 to 2010

Target annual GDP growth: 5%

Brazil is the world largest biofuels producer;

In 2007, Brazilian ethanol internal consumption reached 16.7 billion litters, and ethanol exports totalized 3.4 billion litters;

Brazil represents 33.2% of ethanol global production, and 37% of global exports;

In Brazil, biofuels have already reached competitiveness with fossil fuel/petroleum;

In 2007, “flexfuel” vehicles sales rose 40% over 2006, and represented 86% of total sales of automobiles this year.

Biofuels – Brazil as a key player

High growth of energy demand Opportunity for biofuels

Apex-Brasil promotes

investment attraction to Brazil,

specially major capital inflows,

contributing to Brazilian

competitiveness and exports.

Apex-Brasil – Investment Promotion

Main ActivitiesOrganization of missions to potential investors

Participation in fairs and events in Brazil and abroad

Promotion of workshops and seminars

Visits to companies and distribution chains

Coordination of Business Rounds

Participation in Entrepreneurial Missions

One-stop Shop

Thank you!

•Tel.: 55 (61) 3426.0202•Email: [email protected]•Website: www.apexbrasil.com.br