Investing in Brazil...are you nuts?

Rio Grande do Norte

Well no, actually. In 2003, Goldman Sachs selected Brazil, along with Russia, India and China, as one of the four “BRICs”—the developing countries that would share dominance of the world economy by 2050.

Its growth potential should come as little surprise when you consider that the country produces its own oil along with half the world’s exports of ethanol (a valuable additive to motor fuel).

It already has the ninth largest economy in the world in terms of purchasing power and is on the verge of becoming one of the leading recipients of foreign direct investment (FDI) in Latin America(OECD).

Along with a blossoming economy (the largest in Latin America), the fifth largest country in the world is also benefiting from a dramatic expansion of tourism-related real estate investment. Until relatively recently local banks had not been offering large-scale lending to customers but with the stabilisation of Brazil’s economy they have seen the opportunity for investment. In 2006 property lending doubled in Brazil and the construction industry is booming.

Eight million more homes are needed throughout Brazil, but it’s not just the domestic market that needs to be catered for. Brazil’s tourism sector is rocketing as the country’s many blessings are being counted by an increasing number of visitors to the country. A 134 per cent increase in tourist numbers occurred between 2002 and 2005 and the government – which is keen to see this expansion continue to a high of 9 million annually – is investing heavily in the tourism industry and improving the country’s infrastructure.

The majority of this investment is taking place on the north east coast and in particular in and around the city of Natal, in the state of Rio Grande do Norte. Natal is the safest city in Brazil which bodes well for investors and adds to its tourist appeal.

Steve Worboys, MD of Experience International, said: "Enjoying the best weather in Brazil and sunshine for most of the 365 days of the year, Natal is established as the number one beach destination for tourism in Brazil. Significant government advertising spend focused on tourism has seen an influx of major tour operators and record numbers of international tourists to the region.”