More Brazilian news:
Brazil defeats the recession:
Not even the proverbial optimism of the Brazilian President Lula Inácio da Silva was able to predict such a fast recovery from the world financial crisis. In the month of August alone, 242.126 new jobs were created. This is the best result in the past 17 years, according to the data of the Ministry of Labour.
Between January and August, still in the middle of the crisis, Brazil created 680.034 permanent work positions and with the growth of GDP by 1.9 % in the second quarter of 2009, Brazil ends the technical recession in which it had found itself during the last quarter of 2008 and first quarter of 2009. Inflation remains at 4.4% in September, lower than the central bank’s 2009 inflation target of 4.5%
Contrary to what was happening throughout the rest of the world, Foreign Direct Investment (FDI) increased in Brazil in 2008 by 30.3% compared to 2007. The country jumped four places securing for itself 10th place in the world ranking, becoming the most international of the BRIC economies. In comparison, last year the global volume of FDI dropped by 14.2%, in developed economies it dropped by 29.2%, in developing economies it grew on average by 17.3% and in Latin American economies FDI grew by an average of 13.2%.
With regards to the BRIC economies, Russia has traditionally led the ratio between FDI and GDP however in 2008 while Russia received 12.7% of GDP in FDI, Brazil received a staggering 18.3% - India received 9.9% and China received 8.7%. Some even estimate that Brazil may reach the 4th Global position by 2011.
The recovery of the Brazilian economy has however made the lack of qualified labour more pronounced. Despite unemployment in the country, qualified labour is lacking in strategically important sectors such as Petrol and Gas, Civil Engineering and Agribusiness. Due to the demand for social housing generated by the “Minha Casa Minha Vida” plan, there is a greater lack of qualified labour in the construction sector at all levels. Because of the lack of supply of qualified labour, the value of qualified workers has increased significantly, raising the income of the construction workers. More and more workers are leaving low paid jobs to work in construction – where they can earn almost double the minimum national salary.
Last month in August, 45 thousand new jobs were created in the Civil Engineering sector alone, bringing the total new jobs created in the sector since December 2008 to 176 thousand, which means that not only have the 109 thousand jobs lost during the recession been recovered, but the highest employment records of last year have also already been surpassed.
During this Christmas period, shopping centres are set to recruit over 130 thousand extra employees, 30% more than the same period in 2008. The optimism of the shopkeepers is due to the improving credit conditions and the strong consumer confidence in the country. 26 new shopping centres will open by the Christmas period and at least 29 others have been through renovations which have expanded their capacity.
The recent Real Estate Fair, held in Sao Paulo, saw over R$ 300 mm granted in real estate financing over the four days which the show ran. Of the 100 thousand properties on offer at the real estate fair, over 48% were aimed at the “Minha Casa Minha Vida” segment. The demand for medium and high end properties also surprised many people – “Such a high demand for mortgages to purchase properties up to R$ 500 thousand was not expected” said the manager of “Nossa Caixa”. The bank gave out R$ 53 mm in loans.
Faced with this new panorama, Lula has confidently announced “While the whole world is suffering from unemployment, Brazil will reach the end of the year with over one million new jobs having been created”. Amongst these new jobs being created is the real estate market, as Lula’s plan is to create one million new social housing homes during 2010, the last year of his Presidential tenure.
The recovery of employment and the expansion of credit by the Bank of Brasil who has officially stated that Brazil is out of Recession, are not the only economic and financial indicators that the country has resumed economic stability. The Sao Paulo stock market is on a high and the Real is stronger than ever.
All of the above has lead to even the most critical of people to recognize that Brazil has miraculously not only managed to come out of the crisis unscathed but has also resumed growth faster than anyone could have predicted.
Sources:
BBC NEWS | Business | Brazil's economy leaves recession (BBC - 11.09.2009)
Brasil derrota a la crisis (El País – 18.09.2009)
O Estado de São Paulo newspaper, 18th September 2009, Page B16 – Business section
O Estado de São Paulo newspaper, 27th September 2009, Page B10 - Economy
O Estado de São Paulo newspaper, 28th September 2009, Page B6 – Economy
O Estado de São Paulo newspaper, 30th September 2009, Page B7 - Economy
