Investments in Brazil Rose Last Year, Study Says
Despite economic instability, Brazil saw an increase in private equity and venture capital investments. Investment in Brazil increased from $5.7 billion to $6.04 billion, and investment in the region (Latin America) increased by 13%. Although investment and start-up activity in Brazil has been increasing or at least remaining constant, inflation continues to be a major concern. Brazil's minister of finance estimates that budget surplus this year will be lower and a cut in government spending of approximately $18.5 billion.
Some investors like Mr. Etlin, a managing partner at the private equity firm Advent International, believe that the tough economic times in Brazil present an opportunity for future growth. He believes that even though fund-raising levels in Brazil decreased some last year, they will begin to recover rather soon. This is mainly due to lower valuations, less competition, and a depreciating currency.
It is likely that a lot of the investment that is going into Brazil is coming from investors who are interested in the World Cup this summer. Once the World Cup ends in Brazil, it is likely that we will see a notable decrease of investment until Brazil holds the Olympics in 2016. However, there should be a dramatic decrease in the Brazilian economy within this decade. China is one of the main investors in Brazil. As we have seen, the Chinese economy is starting to slow notably. If this decrease in Chinese growth continues, there will likely be less of a demand for Brazilian goods. In that sense, it is unlikely that Brazil will enjoy strong investment in the future.
ReplyDeleteI am in agreement with Matt. I also think that the reason why Brazil is showing such an increase in investment is due to the fact that Brazil will be hosting the World Cup this summer. I think after that, the investors will more likely to leave Brazil when the hype of the World Cup dies out. It makes sense for investors to make investment in Brazil now because this summer Brazil will compacted with millions of people from all over the world. Also, it is the best time firms to let people know about their goods and service while millions of people will be watching the world's game, soccer.
ReplyDeleteBrazil goverment completely are doing right action for inflation so,I think that Brazil don't have to care too much about inflation.However, Investment will be drop as Brazil develop so the goverment have to look investment, meaning most developed countrie is suffer from decreasing investment.
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