In 2015, the Brazilian economy contracted by 3.8 percent, per the International Monetary Fund, and faces another 3.5 contraction in 2016, the first back-to-back years of recession since the 1930s. The bank projects the contraction will end in 2017 with zero percent growth. As is the investment rule of thumb, while much remains uncertain in the short term, the gains to be had will come in the long term.
One of the factors working most in Brazil’s economic favor in the years ahead will be its market size. The UN projects Brazil will add 21 million to its current population of over 200 million by 2030, more than any other country in Latin America. Moreover, with an urbanization rate of 85 percent, the country is home to the largest urban population in the region, with 75 million more city dwellers than Mexico, which has the second largest. Brazil’s National Development Bank projects the growing population will make infrastructure a key spot for investment over the next few years.
That market size gives Brazil its most competitive edge, per the World Economic Forum’s 2015-2016 Global Competitiveness Report. While overall Brazil ranked 75 out of 140 countries in competitiveness, it came in seventh in market size, and first in this category in Latin America and the Caribbean. The country was most improved in the area of technological readiness from the previous year’s report, a fact which Brazilian entrepreneurs are taking advantage of through e-commerce ventures.
Luisa Leme contributed to this article.