SlideShare a Scribd company logo
1 of 28
Presenter’s Name – Partha Tripathi, Subodh Pandey, Bipin Chandra, Avik Sinha, Shantanu, Bibhu Mohapatra

March 2012




                          Country Risk Analysis
                                 Brazil
Country Risk Analysis Report- Brazil


Table of contents



Country History
General Domestic Scenario
Fiscal policy
Monetary policy
Foreign Trade
Strength
Weakness
Risk Level and exposure limits
Country Risk Analysis Report-Brazil-History


Country History



Background
    Following more than three centuries under Portuguese rule, Brazil gained its independence
   in 1822, maintaining a monarchical system of government until the abolition of slavery in
   1888 and the subsequent proclamation of a republic by the military in 1889. Brazilian coffee
   exporters politically dominated the country until populist leader Getulio VARGAS rose to
   power in 1930. By far the largest and most populous country in South America, Brazil
   underwent more than half a century of populist and military government until 1985, when the
   military regime peacefully ceded power to civilian rulers. Brazil continues to pursue industrial
   and agricultural growth and development of its interior. Exploiting vast natural resources and
   a large labor pool, it is today South America's leading economic power and a regional
   leader, one of the first in the area to begin an economic recovery. Highly unequal income
   distribution and crime remain pressing problems.




Source: CIA report
Country Risk Analysis Report-Brazil-History


Country History

Overview
 Location: Eastern side of South America Bordering Atlantic Ocean
 Area: 8,511,965 Sq Km
 Boundary: Total land Border 14691 KM, bordering Argentina, Bolivia, Colombia, French
  Guiana, Guyana, Paraguay, Peru, Surinam, Uruguay, Venezuela.
 States 26 and one federal district
 Time Zone : UTC-3 hrs, Day light Saving applicable
 Population Growth Rate: 1.17%
 Language: Portuguese (official)
 Literacy : 90.3%
 Natural Resource: Bauxite, Iron ore, Gold, Manganese, Nickel, Phosphates, Platinum, tin,
  Petroleum, Hydro power, Timber
 Land Use: Arable land: 6.96%, Permanent Corps: 0.9%, Others 92.15%
 Natural Hazard: recurring drought in Northeast, floods and occasional frost in south

Source: US government States Department
Country Risk Analysis Report-Brazil-History


Country History

Government Structure
 Official name: Federative Republic of Brazil
 Government Type: Federal
 Constitution :5 October 1988
 Legal System: Based on Roman Codes has not accepted compulsory ICJ Jurisdiction but
  accepts ICCt jurisdiction
 Executive System
   – Head of government : President
   – Other Executive: Vice president, Cabinet appointed by President
   – Election: President and Vice President are elected on four year term by popular Votes
 Legislative System: Bicameral
    – National Congress: 81 seats
    – Chamber of Deputies : 513 seats
 Judicial System:
       – Supreme Federal Tribunal
       – Higher Tribunal of Justice
       – Regional federal Tribunal
Source: Brazilian Government
Country Risk Analysis Report-Brazil-History


Country History

Political Structure
 Present president Dilma Rousseff is from Workers party and Vice president Micel Temer is
  from Brazillian Democratic Movement party
 Major Party and Ideology leaning
      Name of Party                           Abbreviation     Leaning
      Workers' Party                          PT               Center –Left
      Democrats                               DEM              Center-Right
      Brazilian Democratic Movement Party     PMDB             Center
      Brazilian Social Democratic Party       PSDB             Center
      Green Party                             PV               Center-Left
      Socialism and Freedom Party             PSOL             Left
      Brazilian Labor Party                   PTB              Center Right
      Brazilian Socialist Party               PSB              Center-Left
      Democratic Labor Party                  PDT              Center-Left
      Communist Party of Brazil               PCdoB            Left
      Progressive Party                       PP               Center-Right

Source: US Government Department of States
Country Risk Analysis Report-Brazil-History


Country History

Social Structure and Key Indicators
 Major ethnic groups: white 53.7%, Brown 38.5%, Black 6.2% (2000 census)
 Religion: Roman Catholic 73.6%, Protestant 15.4% (2000 census)
 Age Structure: less than 14 year 26.2%, 15-64 year 67%, 65 year and above 6.7% (2011)
 Median age: Total 29.3 years, male 28.5 years and female 30.1 years (2011 est)
 Urbanization: urban population 87% (2010), urbanization rate 1.1% (2010-15 est)
 Sex Ratio: 0.98 males per female (2012)
 Maternal Mortality rate: 58 deaths per 100,000 live birth (2008 data)
 Infant Mortality: 20.5 per 1000 live birth (2012 est)
 Health Expenditure : 9% of GDP
 Unemployment: 17.8% (2009), 5.9% (2010)
 HDI : 0.718, category High (84th Rank ) (source UNDP 2011)
 Gini coefficient (53.9) 2009 (source world bank)
Source: CIA report except HDI and Gini coeffecient
Country Risk Analysis Report- Brazil


Table of contents



Country History
General Domestic Scenario
Fiscal policy
Monetary policy
Foreign Trade
Strength
Weakness
Risk Level and exposure limits
Country Risk Analysis Report-Brazil-Domestic Scenario


General Domestic Scenario



 GDP ( Price 2000 in USD): 916,131,427,896 USD (2010)
 GDP Growth rate : 7.5% however it had a negative growth in 2009 however 5 year average
  is 4.7%
 GDP per capita ( Price 2000 in USD) : 4699.4 USD average 5 year growth rate 3.6%
 Gini Index : 56.4 (2005)
 Unemployment rate : 6.7% (2010)
 Internal Savings/GDP ratio : 17% (2010)
 Investment to GDP ratio : 19% (2010)
 Gross Domestic Savings/Gross Domestic Fixed Investment : 94% (2010)




Source: World bank data
Country Risk Analysis Report- Brazil


Table of contents



Country History
General Domestic Scenario
Fiscal policy
Monetary policy
Foreign Trade
Strength
Weakness
Risk Level and exposure limits
Country Risk Analysis Report-Brazil-Fiscal Policy


Fiscal Policy



 Budget Deficit/GDP ratio : (2.9%) (2010)
 Internal Debt/GDP ratio : 61% (2010)
 Fiscal Surplus/GDP ratio: 2.1% (2010)




World Bank Data
Country Risk Analysis Report- Brazil


Table of contents



Country History
General Domestic Scenario
Fiscal policy
Monetary policy
Foreign Trade
Strength
Weakness
Risk Level and exposure limits
Country Risk Analysis Report-Brazil-Monetary Policy


Monetary Policy



 Inflation rate (consumer price): 5%
 GDP Deflator: 7.3%
 Broad Money Supply Growth (M3): 15.4%
 Real Rate of Interest rate : 30.4%
 Benchmark Interest Rate: 9.75% on Jan 2012 with historical high of 45% in March1999




Source: World Bank Data for the year 2010
Country Risk Analysis Report- Brazil


Table of contents



Country History
General Domestic Scenario
Fiscal policy
Monetary policy
Foreign Trade
Strength
Weakness
Risk Level and exposure limits
Country Risk Analysis Report-Brazil-Foreign Trade


Foreign Trade

 Growth rate of Exports :16.83 Billion USD(2010), 21.34 Billion USD(2011), 26.8% Growth
 Growth rate of imports :15.15 Billion USD (2010), 18.85 Billion USD (2011), 24.4% Growth
 Current Account balance: -24.302 Billion USD (2009), -47.365 Billion (2010),
 Necessary imports: Oil, Power, machinery, electrical and transport equipment, chemical products
 Export/Import ratio : 1.11 (2010), 1.132 (2011)
 Trade/GDP: 34.9%
 Current account/GDP ratio : -2.21%
 International Reserves: 565.639 Million USD on 31st Dec 2011
 (International Reserves-Gold)/Imports : 3% (2011)
 External Debt/GDP ratio 44.75% (2011)
 Short term debt/Reserves (minus gold) 3.94%
 External Debt Services/Exports 2.68(2011)
 Capital Inflows: Total 65.279 Billion USD, FDI 48.437 Billion USD
 Exchange currency rate 1.602 USD/ BRL



Source: OECD database
Country Risk Analysis Report- Brazil


Table of contents



Country History
General Domestic Scenario
Fiscal policy
Monetary policy
Foreign Trade
Strength
Weakness
Risk Level and exposure limits
Country Risk Analysis Report-Brazil-Strength


Strength

     Strength Factors                           Possible Repercussions
 Abundant Natural resources                    High Political Stability
 Fiscal and Monetary policy has been           Less Social demands
  prudent
                                                Enough Supply of labour force
 Young Population
                                                Educated labour force
 High FDI
                                                Opportunity for Private profits
 Domestic market potential with low labour
  cost
 reduction in Gini Index
 High HDI
 Healthcare and sanitation well reached
 Low Internal debt
 High Literacy level
Country Risk Analysis Report- Brazil


Table of contents



Country History
General Domestic Scenario
Fiscal policy
Monetary policy
Foreign Trade
Strength
Weakness
Risk Level and exposure limits
Country Risk Analysis Report-Brazil-Weakness


  Weakness

       Weakness Factors                                Possible Repercussions
 Too high foreign currency inflow causing             Export reduction
  currency appreciation
                                                       Rise in spreads
 High Money supply growth rate
 Real interest rate is still very but reduced over
                                                       Higher compliance cost for private
  period of time                                        business
 High Tax complexities                                Higher inflation
Country Risk Analysis Report- Brazil


Table of contents



Country History
General Domestic Scenario
Fiscal policy
Monetary policy
Foreign Trade
Strength
Weakness
Risk Level and exposure limits
Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits


Risk Level and Exposure Limits


   Political and Social stability

   Economic growth Prospects

   Domestic Financial stability

   External competitiveness

   Debt Servicing Capacity

   BOP Sustainability
Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits


Risk Level and Exposure Limits


   Political and Social stability

                Brazil is Federal Republic comprising of 26 states and
       Federal District. Executive, Legislative and Judiciary are the
       three main bodies of functionary in the country. There is
       demarcation of activities of these three bodies. There is also
       checks and balances amongst each other. The Government
       head is elected by people and now the trends are of coalition
       politics where many parties come together to form government.
       This has resulted in stable Democratic system.

               Brazil society is mainly composed of two major ethnic
       groups, Government spends about 9% of GDP in health care
       and sanitation. Unemployment has reduced. This has resulted
       in higher Human development Index and lower GINI Index.
       Male female ratio is healthy.
Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits


Risk Level and Exposure Limits


   Economic growth Prospects

               Brazil economy is growing economy. GDP is growing at
       a high rate of 7.5% over year 2009, however it had experienced
       a dip in GDP growth in the year 2009. Long term average GDP
       growth rate is 4.7%. Service sector has maximum share of
       GDP followed by Manufacturing. GDP per capita has increased
       by 3.5%. Gross Savings has increased to 17% of GDP and
       Investment is 19% of GDP. Thus Investment in Economy is
       mainly fueled by Internal savings. Inflation is moderate. FDI is
       also very high causing currency appreciation. It has introduced
       tax on FDI to restrict the inflow. Thus Brazil has high and stable
       economic growth prospect.
Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits


Risk Level and Exposure Limits


   Domestic Financial stability

               Brazil has fiscal surplus of 2.19% of GDP. This is cause
       of worry as Brazil is not able to fully realize Growth Prospects.
       The total debt is 16.6% of GDP and has a reducing trend. Debt
       servicing as percentage of exports is 19% which is relatively
       lower.

                       There is negative risk assessment of higher interest
       rate.

               In the Overall assessment Domestic Financial condition
       is quite stable. But has a downside risk lower expenditure as
       compared to receipts.
Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits


Risk Level and Exposure Limits


   External competitiveness

               The Brazilian economy is export oriented. There is huge
       inflow of FDI and portfolio investment due better investment
       climate. This causing Brazilian Currency to appreciate against
       US dollars from 0.63 BRL/USD to 0.550. Currency appreciation
       will reduce Export competitiveness of Brazil.

               Brazil has high FDI flow thus to restrict FDI flow Brazil
       has introduced 2% tax on FDI. This will restrict FDI flow. This
       may help restrict Brazilian currency appreciation.
Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits


Risk Level and Exposure Limits


   Debt Servicing Capacity

              External debt is 44.5% of GDP. External Debt servicing
       requirement is low with obligation at 19% of Exports. Brazil has
       High reserves. Due to currency getting appreciated and high
       growth of exports Brazil has low risk of Debt not being serviced.
Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits


Risk Level and Exposure Limits


   BOP Sustainability

               Export is growing at the rate of 26.8% and import at the
       rate of 24.4%. Currently export is more than imports with export
       import ratio of 1.132. The Balance of Payment is sustainable
       with export growing more than imports. There is less risk of
       BOP not being sustainable.
Please contact at pt.partha.tripathi@gmail.com for
          further for further information

More Related Content

What's hot

BRAZIL COUNTRY ANALYSIS
BRAZIL COUNTRY ANALYSISBRAZIL COUNTRY ANALYSIS
BRAZIL COUNTRY ANALYSISSheryl Mehra
 
Brazil 2016: Economic perspectives & Opportunities during the crisis
Brazil 2016: Economic perspectives & Opportunities during the crisisBrazil 2016: Economic perspectives & Opportunities during the crisis
Brazil 2016: Economic perspectives & Opportunities during the crisisBarral M Jorge
 
Regional Analysis: Latin america & Caribbean
Regional Analysis: Latin america & CaribbeanRegional Analysis: Latin america & Caribbean
Regional Analysis: Latin america & CaribbeanBushra Ahmed
 
Ib venezuela-group-9
Ib venezuela-group-9Ib venezuela-group-9
Ib venezuela-group-9Ruchir Shukla
 
Ecuador foreign investement, Pest analysis
Ecuador foreign investement, Pest analysisEcuador foreign investement, Pest analysis
Ecuador foreign investement, Pest analysisCarolina Granda
 
Brazil: Doing business Assignment
Brazil: Doing business AssignmentBrazil: Doing business Assignment
Brazil: Doing business AssignmentVishal Gupta
 
Presentation Brazil Marketing
Presentation Brazil MarketingPresentation Brazil Marketing
Presentation Brazil Marketinglivmello
 
Building nigeria's productive capacity
Building nigeria's productive capacityBuilding nigeria's productive capacity
Building nigeria's productive capacityBolaji Okusaga
 
Mexico - Economy
Mexico - EconomyMexico - Economy
Mexico - EconomyMMonderin
 
Globalisation Project 1
Globalisation Project 1Globalisation Project 1
Globalisation Project 1Rahul Trivedi
 
Mexico a country study
Mexico a country studyMexico a country study
Mexico a country studySambit Biswal
 
Market Analysis Brazil
Market Analysis BrazilMarket Analysis Brazil
Market Analysis Brazilsimonanink
 
Doing business in mexico ppt may2017
Doing business in mexico ppt may2017Doing business in mexico ppt may2017
Doing business in mexico ppt may2017Business Turku
 
Mexico Economic Report
Mexico Economic ReportMexico Economic Report
Mexico Economic ReportSarah Lopez
 
Story of north american free trade agreement nafta its success and failure
Story of north american free trade agreement nafta its success and failureStory of north american free trade agreement nafta its success and failure
Story of north american free trade agreement nafta its success and failureIAEME Publication
 
Movie Location Project
Movie Location ProjectMovie Location Project
Movie Location ProjectSeQuanNorman1
 

What's hot (20)

Brazil
BrazilBrazil
Brazil
 
BRAZIL COUNTRY ANALYSIS
BRAZIL COUNTRY ANALYSISBRAZIL COUNTRY ANALYSIS
BRAZIL COUNTRY ANALYSIS
 
Brazil 2016: Economic perspectives & Opportunities during the crisis
Brazil 2016: Economic perspectives & Opportunities during the crisisBrazil 2016: Economic perspectives & Opportunities during the crisis
Brazil 2016: Economic perspectives & Opportunities during the crisis
 
Regional Analysis: Latin america & Caribbean
Regional Analysis: Latin america & CaribbeanRegional Analysis: Latin america & Caribbean
Regional Analysis: Latin america & Caribbean
 
Ib venezuela-group-9
Ib venezuela-group-9Ib venezuela-group-9
Ib venezuela-group-9
 
Ecuador foreign investement, Pest analysis
Ecuador foreign investement, Pest analysisEcuador foreign investement, Pest analysis
Ecuador foreign investement, Pest analysis
 
Brazil: Doing business Assignment
Brazil: Doing business AssignmentBrazil: Doing business Assignment
Brazil: Doing business Assignment
 
Presentation Brazil Marketing
Presentation Brazil MarketingPresentation Brazil Marketing
Presentation Brazil Marketing
 
Building nigeria's productive capacity
Building nigeria's productive capacityBuilding nigeria's productive capacity
Building nigeria's productive capacity
 
Mexico - Economy
Mexico - EconomyMexico - Economy
Mexico - Economy
 
Globalisation Project 1
Globalisation Project 1Globalisation Project 1
Globalisation Project 1
 
Mexico a country study
Mexico a country studyMexico a country study
Mexico a country study
 
Market Analysis Brazil
Market Analysis BrazilMarket Analysis Brazil
Market Analysis Brazil
 
Doing Business in Mexico
Doing Business in MexicoDoing Business in Mexico
Doing Business in Mexico
 
Doing business in mexico ppt may2017
Doing business in mexico ppt may2017Doing business in mexico ppt may2017
Doing business in mexico ppt may2017
 
Mexico Economic Report
Mexico Economic ReportMexico Economic Report
Mexico Economic Report
 
Story of north american free trade agreement nafta its success and failure
Story of north american free trade agreement nafta its success and failureStory of north american free trade agreement nafta its success and failure
Story of north american free trade agreement nafta its success and failure
 
SouthAfricaImportProject
SouthAfricaImportProjectSouthAfricaImportProject
SouthAfricaImportProject
 
South Africa : Size, Accessibility, Economy, Trade & Market
South Africa : Size, Accessibility, Economy, Trade & MarketSouth Africa : Size, Accessibility, Economy, Trade & Market
South Africa : Size, Accessibility, Economy, Trade & Market
 
Movie Location Project
Movie Location ProjectMovie Location Project
Movie Location Project
 

Viewers also liked

Main
MainMain
Maindomsr
 
Doing business in Brazil
Doing business in BrazilDoing business in Brazil
Doing business in BrazilComputershare
 
Brazil presentation model
Brazil presentation modelBrazil presentation model
Brazil presentation modelKevin de Wit
 
The economy growth of brazil
The economy growth of brazilThe economy growth of brazil
The economy growth of brazilAnkur Patel
 
Brazil - economic analysis
Brazil - economic analysisBrazil - economic analysis
Brazil - economic analysisShweta Varma
 
Political Science 2 – Comparative Politics - Power Point #4
Political Science 2 – Comparative Politics - Power Point #4Political Science 2 – Comparative Politics - Power Point #4
Political Science 2 – Comparative Politics - Power Point #4John Paul Tabakian
 
Political Science 2 – Comparative Politics - Power Point #9
Political Science 2 – Comparative Politics - Power Point #9Political Science 2 – Comparative Politics - Power Point #9
Political Science 2 – Comparative Politics - Power Point #9John Paul Tabakian
 
Brazil Country Presentation
Brazil Country PresentationBrazil Country Presentation
Brazil Country PresentationBruno Peroni
 
Brazil Monthly Chart Pack | February 2017
Brazil Monthly Chart Pack | February 2017Brazil Monthly Chart Pack | February 2017
Brazil Monthly Chart Pack | February 2017UKinBrazilNetwork
 

Viewers also liked (11)

Main
MainMain
Main
 
Doing business in Brazil
Doing business in BrazilDoing business in Brazil
Doing business in Brazil
 
Brazil presentation model
Brazil presentation modelBrazil presentation model
Brazil presentation model
 
Doing Business in Brazil
Doing Business in BrazilDoing Business in Brazil
Doing Business in Brazil
 
The economy growth of brazil
The economy growth of brazilThe economy growth of brazil
The economy growth of brazil
 
Brazil - economic analysis
Brazil - economic analysisBrazil - economic analysis
Brazil - economic analysis
 
Country risk analysis
Country risk analysisCountry risk analysis
Country risk analysis
 
Political Science 2 – Comparative Politics - Power Point #4
Political Science 2 – Comparative Politics - Power Point #4Political Science 2 – Comparative Politics - Power Point #4
Political Science 2 – Comparative Politics - Power Point #4
 
Political Science 2 – Comparative Politics - Power Point #9
Political Science 2 – Comparative Politics - Power Point #9Political Science 2 – Comparative Politics - Power Point #9
Political Science 2 – Comparative Politics - Power Point #9
 
Brazil Country Presentation
Brazil Country PresentationBrazil Country Presentation
Brazil Country Presentation
 
Brazil Monthly Chart Pack | February 2017
Brazil Monthly Chart Pack | February 2017Brazil Monthly Chart Pack | February 2017
Brazil Monthly Chart Pack | February 2017
 

Similar to Country risk analysis_brazil

Political risk analysis of oil sector of Brazil
Political risk analysis of oil sector of  BrazilPolitical risk analysis of oil sector of  Brazil
Political risk analysis of oil sector of BrazilPartha Tripathi
 
Intb powerpoint 2
Intb powerpoint 2Intb powerpoint 2
Intb powerpoint 2Zoë Bergin
 
Country environmental overview
Country environmental overviewCountry environmental overview
Country environmental overviewSarah McDowell
 
Country reports south_america_2016_crsa1601en
Country reports south_america_2016_crsa1601enCountry reports south_america_2016_crsa1601en
Country reports south_america_2016_crsa1601enEthos Media S.A.
 
Brazil-International Country Risk Guide Worksheet
Brazil-International Country Risk Guide WorksheetBrazil-International Country Risk Guide Worksheet
Brazil-International Country Risk Guide WorksheetMichael Yatskievych
 
Political and economical of brazhil
Political and economical of brazhilPolitical and economical of brazhil
Political and economical of brazhilutkarshkanhere
 
Jp morgan brasil 2011 presentación
Jp morgan brasil 2011 presentaciónJp morgan brasil 2011 presentación
Jp morgan brasil 2011 presentaciónAlvaro Uribe V.
 
Country Analysis Norway Australia - Brazil
Country Analysis Norway   Australia - BrazilCountry Analysis Norway   Australia - Brazil
Country Analysis Norway Australia - BrazilSuman Bhattarai
 
Vespa and the Brazilian market
Vespa and the Brazilian marketVespa and the Brazilian market
Vespa and the Brazilian marketAidan Barrett
 
PR - 2011 - bdo - brazil -the future is arriving
PR - 2011 - bdo - brazil -the future is arrivingPR - 2011 - bdo - brazil -the future is arriving
PR - 2011 - bdo - brazil -the future is arrivingDelta Economics & Finance
 
Case study example essay 2008
Case study example essay 2008Case study example essay 2008
Case study example essay 2008Jack Bennett
 
PR - 2011 - microsoft - brazil-the future is arriving
PR - 2011 - microsoft - brazil-the future is arrivingPR - 2011 - microsoft - brazil-the future is arriving
PR - 2011 - microsoft - brazil-the future is arrivingDelta Economics & Finance
 
Investing In Brazil (1)
Investing In Brazil (1)Investing In Brazil (1)
Investing In Brazil (1)Naeem Iqbal
 
WBI - RSCH - Brazil and Latin America 2013
WBI - RSCH - Brazil and Latin America 2013WBI - RSCH - Brazil and Latin America 2013
WBI - RSCH - Brazil and Latin America 2013rschlaw
 
June 2012 - Electric energy sector needs rewiring
June 2012 - Electric energy sector needs rewiringJune 2012 - Electric energy sector needs rewiring
June 2012 - Electric energy sector needs rewiringFGV Brazil
 

Similar to Country risk analysis_brazil (20)

Political risk analysis of oil sector of Brazil
Political risk analysis of oil sector of  BrazilPolitical risk analysis of oil sector of  Brazil
Political risk analysis of oil sector of Brazil
 
Intb powerpoint 2
Intb powerpoint 2Intb powerpoint 2
Intb powerpoint 2
 
Country environmental overview
Country environmental overviewCountry environmental overview
Country environmental overview
 
Country reports south_america_2016_crsa1601en
Country reports south_america_2016_crsa1601enCountry reports south_america_2016_crsa1601en
Country reports south_america_2016_crsa1601en
 
Brazil-International Country Risk Guide Worksheet
Brazil-International Country Risk Guide WorksheetBrazil-International Country Risk Guide Worksheet
Brazil-International Country Risk Guide Worksheet
 
Political and economical of brazhil
Political and economical of brazhilPolitical and economical of brazhil
Political and economical of brazhil
 
Pinkberry mrk plan 1
Pinkberry mrk plan 1Pinkberry mrk plan 1
Pinkberry mrk plan 1
 
Jp morgan brasil 2011 presentación
Jp morgan brasil 2011 presentaciónJp morgan brasil 2011 presentación
Jp morgan brasil 2011 presentación
 
Brazil country analysis report
Brazil country analysis report Brazil country analysis report
Brazil country analysis report
 
Country Analysis Norway Australia - Brazil
Country Analysis Norway   Australia - BrazilCountry Analysis Norway   Australia - Brazil
Country Analysis Norway Australia - Brazil
 
Vespa and the Brazilian market
Vespa and the Brazilian marketVespa and the Brazilian market
Vespa and the Brazilian market
 
PR - 2011 - bdo - brazil -the future is arriving
PR - 2011 - bdo - brazil -the future is arrivingPR - 2011 - bdo - brazil -the future is arriving
PR - 2011 - bdo - brazil -the future is arriving
 
Case study example essay 2008
Case study example essay 2008Case study example essay 2008
Case study example essay 2008
 
2011 Ohio Hispanic Business Summit
2011 Ohio Hispanic Business Summit2011 Ohio Hispanic Business Summit
2011 Ohio Hispanic Business Summit
 
PR - 2011 - microsoft - brazil-the future is arriving
PR - 2011 - microsoft - brazil-the future is arrivingPR - 2011 - microsoft - brazil-the future is arriving
PR - 2011 - microsoft - brazil-the future is arriving
 
Investing In Brazil (1)
Investing In Brazil (1)Investing In Brazil (1)
Investing In Brazil (1)
 
Opportunity mapping
Opportunity mappingOpportunity mapping
Opportunity mapping
 
PEST Analysis of USA
PEST Analysis of USAPEST Analysis of USA
PEST Analysis of USA
 
WBI - RSCH - Brazil and Latin America 2013
WBI - RSCH - Brazil and Latin America 2013WBI - RSCH - Brazil and Latin America 2013
WBI - RSCH - Brazil and Latin America 2013
 
June 2012 - Electric energy sector needs rewiring
June 2012 - Electric energy sector needs rewiringJune 2012 - Electric energy sector needs rewiring
June 2012 - Electric energy sector needs rewiring
 

Recently uploaded

Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfJohnCarloValencia4
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhangmcgroupjeya
 
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 Building Your Personal Brand on LinkedIn - Expert Planet-  2024 Building Your Personal Brand on LinkedIn - Expert Planet-  2024
Building Your Personal Brand on LinkedIn - Expert Planet- 2024Stephan Koning
 
7movierulz.uk
7movierulz.uk7movierulz.uk
7movierulz.ukaroemirsr
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursKaiNexus
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Onlinelng ths
 
Data skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story pointsData skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story pointsyasinnathani
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfHajeJanKamps
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
MoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor PresentationMoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor Presentationbaron83
 
Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Lviv Startup Club
 
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003believeminhh
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessAPCO
 
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfTalent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfCharles Cotter, PhD
 
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGUNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGlokeshwarmaha
 
Slicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinSlicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinAnton Skornyakov
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxJemalSeid25
 

Recently uploaded (20)

Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhang
 
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 Building Your Personal Brand on LinkedIn - Expert Planet-  2024 Building Your Personal Brand on LinkedIn - Expert Planet-  2024
Building Your Personal Brand on LinkedIn - Expert Planet- 2024
 
7movierulz.uk
7movierulz.uk7movierulz.uk
7movierulz.uk
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, Ours
 
To Create Your Own Wig Online To Create Your Own Wig Online
To Create Your Own Wig Online  To Create Your Own Wig OnlineTo Create Your Own Wig Online  To Create Your Own Wig Online
To Create Your Own Wig Online To Create Your Own Wig Online
 
Data skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story pointsData skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story points
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
Investment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV IndustriesInvestment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV Industries
 
MoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor PresentationMoneyBridge Pitch Deck - Investor Presentation
MoneyBridge Pitch Deck - Investor Presentation
 
Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)Michael Vidyakin: Introduction to PMO (UA)
Michael Vidyakin: Introduction to PMO (UA)
 
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
 
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for BusinessQ2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
Q2 2024 APCO Geopolitical Radar - The Global Operating Environment for Business
 
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdfTalent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
Talent Management research intelligence_13 paradigm shifts_20 March 2024.pdf
 
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGUNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
 
Slicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup BerlinSlicing Work on Business Agility Meetup Berlin
Slicing Work on Business Agility Meetup Berlin
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptx
 

Country risk analysis_brazil

  • 1. Presenter’s Name – Partha Tripathi, Subodh Pandey, Bipin Chandra, Avik Sinha, Shantanu, Bibhu Mohapatra March 2012 Country Risk Analysis Brazil
  • 2. Country Risk Analysis Report- Brazil Table of contents Country History General Domestic Scenario Fiscal policy Monetary policy Foreign Trade Strength Weakness Risk Level and exposure limits
  • 3. Country Risk Analysis Report-Brazil-History Country History Background Following more than three centuries under Portuguese rule, Brazil gained its independence in 1822, maintaining a monarchical system of government until the abolition of slavery in 1888 and the subsequent proclamation of a republic by the military in 1889. Brazilian coffee exporters politically dominated the country until populist leader Getulio VARGAS rose to power in 1930. By far the largest and most populous country in South America, Brazil underwent more than half a century of populist and military government until 1985, when the military regime peacefully ceded power to civilian rulers. Brazil continues to pursue industrial and agricultural growth and development of its interior. Exploiting vast natural resources and a large labor pool, it is today South America's leading economic power and a regional leader, one of the first in the area to begin an economic recovery. Highly unequal income distribution and crime remain pressing problems. Source: CIA report
  • 4. Country Risk Analysis Report-Brazil-History Country History Overview  Location: Eastern side of South America Bordering Atlantic Ocean  Area: 8,511,965 Sq Km  Boundary: Total land Border 14691 KM, bordering Argentina, Bolivia, Colombia, French Guiana, Guyana, Paraguay, Peru, Surinam, Uruguay, Venezuela.  States 26 and one federal district  Time Zone : UTC-3 hrs, Day light Saving applicable  Population Growth Rate: 1.17%  Language: Portuguese (official)  Literacy : 90.3%  Natural Resource: Bauxite, Iron ore, Gold, Manganese, Nickel, Phosphates, Platinum, tin, Petroleum, Hydro power, Timber  Land Use: Arable land: 6.96%, Permanent Corps: 0.9%, Others 92.15%  Natural Hazard: recurring drought in Northeast, floods and occasional frost in south Source: US government States Department
  • 5. Country Risk Analysis Report-Brazil-History Country History Government Structure  Official name: Federative Republic of Brazil  Government Type: Federal  Constitution :5 October 1988  Legal System: Based on Roman Codes has not accepted compulsory ICJ Jurisdiction but accepts ICCt jurisdiction  Executive System – Head of government : President – Other Executive: Vice president, Cabinet appointed by President – Election: President and Vice President are elected on four year term by popular Votes  Legislative System: Bicameral – National Congress: 81 seats – Chamber of Deputies : 513 seats  Judicial System: – Supreme Federal Tribunal – Higher Tribunal of Justice – Regional federal Tribunal Source: Brazilian Government
  • 6. Country Risk Analysis Report-Brazil-History Country History Political Structure  Present president Dilma Rousseff is from Workers party and Vice president Micel Temer is from Brazillian Democratic Movement party  Major Party and Ideology leaning Name of Party Abbreviation Leaning Workers' Party PT Center –Left Democrats DEM Center-Right Brazilian Democratic Movement Party PMDB Center Brazilian Social Democratic Party PSDB Center Green Party PV Center-Left Socialism and Freedom Party PSOL Left Brazilian Labor Party PTB Center Right Brazilian Socialist Party PSB Center-Left Democratic Labor Party PDT Center-Left Communist Party of Brazil PCdoB Left Progressive Party PP Center-Right Source: US Government Department of States
  • 7. Country Risk Analysis Report-Brazil-History Country History Social Structure and Key Indicators  Major ethnic groups: white 53.7%, Brown 38.5%, Black 6.2% (2000 census)  Religion: Roman Catholic 73.6%, Protestant 15.4% (2000 census)  Age Structure: less than 14 year 26.2%, 15-64 year 67%, 65 year and above 6.7% (2011)  Median age: Total 29.3 years, male 28.5 years and female 30.1 years (2011 est)  Urbanization: urban population 87% (2010), urbanization rate 1.1% (2010-15 est)  Sex Ratio: 0.98 males per female (2012)  Maternal Mortality rate: 58 deaths per 100,000 live birth (2008 data)  Infant Mortality: 20.5 per 1000 live birth (2012 est)  Health Expenditure : 9% of GDP  Unemployment: 17.8% (2009), 5.9% (2010)  HDI : 0.718, category High (84th Rank ) (source UNDP 2011)  Gini coefficient (53.9) 2009 (source world bank) Source: CIA report except HDI and Gini coeffecient
  • 8. Country Risk Analysis Report- Brazil Table of contents Country History General Domestic Scenario Fiscal policy Monetary policy Foreign Trade Strength Weakness Risk Level and exposure limits
  • 9. Country Risk Analysis Report-Brazil-Domestic Scenario General Domestic Scenario  GDP ( Price 2000 in USD): 916,131,427,896 USD (2010)  GDP Growth rate : 7.5% however it had a negative growth in 2009 however 5 year average is 4.7%  GDP per capita ( Price 2000 in USD) : 4699.4 USD average 5 year growth rate 3.6%  Gini Index : 56.4 (2005)  Unemployment rate : 6.7% (2010)  Internal Savings/GDP ratio : 17% (2010)  Investment to GDP ratio : 19% (2010)  Gross Domestic Savings/Gross Domestic Fixed Investment : 94% (2010) Source: World bank data
  • 10. Country Risk Analysis Report- Brazil Table of contents Country History General Domestic Scenario Fiscal policy Monetary policy Foreign Trade Strength Weakness Risk Level and exposure limits
  • 11. Country Risk Analysis Report-Brazil-Fiscal Policy Fiscal Policy  Budget Deficit/GDP ratio : (2.9%) (2010)  Internal Debt/GDP ratio : 61% (2010)  Fiscal Surplus/GDP ratio: 2.1% (2010) World Bank Data
  • 12. Country Risk Analysis Report- Brazil Table of contents Country History General Domestic Scenario Fiscal policy Monetary policy Foreign Trade Strength Weakness Risk Level and exposure limits
  • 13. Country Risk Analysis Report-Brazil-Monetary Policy Monetary Policy  Inflation rate (consumer price): 5%  GDP Deflator: 7.3%  Broad Money Supply Growth (M3): 15.4%  Real Rate of Interest rate : 30.4%  Benchmark Interest Rate: 9.75% on Jan 2012 with historical high of 45% in March1999 Source: World Bank Data for the year 2010
  • 14. Country Risk Analysis Report- Brazil Table of contents Country History General Domestic Scenario Fiscal policy Monetary policy Foreign Trade Strength Weakness Risk Level and exposure limits
  • 15. Country Risk Analysis Report-Brazil-Foreign Trade Foreign Trade  Growth rate of Exports :16.83 Billion USD(2010), 21.34 Billion USD(2011), 26.8% Growth  Growth rate of imports :15.15 Billion USD (2010), 18.85 Billion USD (2011), 24.4% Growth  Current Account balance: -24.302 Billion USD (2009), -47.365 Billion (2010),  Necessary imports: Oil, Power, machinery, electrical and transport equipment, chemical products  Export/Import ratio : 1.11 (2010), 1.132 (2011)  Trade/GDP: 34.9%  Current account/GDP ratio : -2.21%  International Reserves: 565.639 Million USD on 31st Dec 2011  (International Reserves-Gold)/Imports : 3% (2011)  External Debt/GDP ratio 44.75% (2011)  Short term debt/Reserves (minus gold) 3.94%  External Debt Services/Exports 2.68(2011)  Capital Inflows: Total 65.279 Billion USD, FDI 48.437 Billion USD  Exchange currency rate 1.602 USD/ BRL Source: OECD database
  • 16. Country Risk Analysis Report- Brazil Table of contents Country History General Domestic Scenario Fiscal policy Monetary policy Foreign Trade Strength Weakness Risk Level and exposure limits
  • 17. Country Risk Analysis Report-Brazil-Strength Strength Strength Factors Possible Repercussions  Abundant Natural resources  High Political Stability  Fiscal and Monetary policy has been  Less Social demands prudent  Enough Supply of labour force  Young Population  Educated labour force  High FDI  Opportunity for Private profits  Domestic market potential with low labour cost  reduction in Gini Index  High HDI  Healthcare and sanitation well reached  Low Internal debt  High Literacy level
  • 18. Country Risk Analysis Report- Brazil Table of contents Country History General Domestic Scenario Fiscal policy Monetary policy Foreign Trade Strength Weakness Risk Level and exposure limits
  • 19. Country Risk Analysis Report-Brazil-Weakness Weakness Weakness Factors Possible Repercussions  Too high foreign currency inflow causing  Export reduction currency appreciation  Rise in spreads  High Money supply growth rate  Real interest rate is still very but reduced over  Higher compliance cost for private period of time business  High Tax complexities  Higher inflation
  • 20. Country Risk Analysis Report- Brazil Table of contents Country History General Domestic Scenario Fiscal policy Monetary policy Foreign Trade Strength Weakness Risk Level and exposure limits
  • 21. Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits Risk Level and Exposure Limits Political and Social stability Economic growth Prospects Domestic Financial stability External competitiveness Debt Servicing Capacity BOP Sustainability
  • 22. Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits Risk Level and Exposure Limits Political and Social stability Brazil is Federal Republic comprising of 26 states and Federal District. Executive, Legislative and Judiciary are the three main bodies of functionary in the country. There is demarcation of activities of these three bodies. There is also checks and balances amongst each other. The Government head is elected by people and now the trends are of coalition politics where many parties come together to form government. This has resulted in stable Democratic system. Brazil society is mainly composed of two major ethnic groups, Government spends about 9% of GDP in health care and sanitation. Unemployment has reduced. This has resulted in higher Human development Index and lower GINI Index. Male female ratio is healthy.
  • 23. Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits Risk Level and Exposure Limits Economic growth Prospects Brazil economy is growing economy. GDP is growing at a high rate of 7.5% over year 2009, however it had experienced a dip in GDP growth in the year 2009. Long term average GDP growth rate is 4.7%. Service sector has maximum share of GDP followed by Manufacturing. GDP per capita has increased by 3.5%. Gross Savings has increased to 17% of GDP and Investment is 19% of GDP. Thus Investment in Economy is mainly fueled by Internal savings. Inflation is moderate. FDI is also very high causing currency appreciation. It has introduced tax on FDI to restrict the inflow. Thus Brazil has high and stable economic growth prospect.
  • 24. Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits Risk Level and Exposure Limits Domestic Financial stability Brazil has fiscal surplus of 2.19% of GDP. This is cause of worry as Brazil is not able to fully realize Growth Prospects. The total debt is 16.6% of GDP and has a reducing trend. Debt servicing as percentage of exports is 19% which is relatively lower. There is negative risk assessment of higher interest rate. In the Overall assessment Domestic Financial condition is quite stable. But has a downside risk lower expenditure as compared to receipts.
  • 25. Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits Risk Level and Exposure Limits External competitiveness The Brazilian economy is export oriented. There is huge inflow of FDI and portfolio investment due better investment climate. This causing Brazilian Currency to appreciate against US dollars from 0.63 BRL/USD to 0.550. Currency appreciation will reduce Export competitiveness of Brazil. Brazil has high FDI flow thus to restrict FDI flow Brazil has introduced 2% tax on FDI. This will restrict FDI flow. This may help restrict Brazilian currency appreciation.
  • 26. Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits Risk Level and Exposure Limits Debt Servicing Capacity External debt is 44.5% of GDP. External Debt servicing requirement is low with obligation at 19% of Exports. Brazil has High reserves. Due to currency getting appreciated and high growth of exports Brazil has low risk of Debt not being serviced.
  • 27. Country Risk Analysis Report-Brazil-Risk Level and Exposure Limits Risk Level and Exposure Limits BOP Sustainability Export is growing at the rate of 26.8% and import at the rate of 24.4%. Currently export is more than imports with export import ratio of 1.132. The Balance of Payment is sustainable with export growing more than imports. There is less risk of BOP not being sustainable.
  • 28. Please contact at pt.partha.tripathi@gmail.com for further for further information