Walking a fiscal and political tightrope
SENSITIVE RISK
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Economic risk
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Business environment risk
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Political risk
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Commercial risk
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Financing risk
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Economic risk
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Business environment risk
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Political risk
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Commercial risk
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Financing risk
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GDP | USD 1840bn (World ranking 9, World Bank 2019) |
Population | 211 mn (World ranking 6, World Bank 2019) |
Form of state | Presidential republic |
Head of state |
Jair Bolsonaro (President) |
Next elections | 2022, presidential and legislative |
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- Important role on an international and regional scale
- Diversified economy
- Growing middle class
- Robust foreign direct investment inflows, high level of foreign exchange reserves and low external debt
- Support for IFIs likely if needed
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- Vulnerable to global commodity prices
- High production costs
- High taxation and red tape ("Brazil cost")
- Large fiscal deficits and increasing public debt
- Political and social tensions on the back of corruption and high income inequality
Trade structure by destination/origin
(% of total)
Exports | Rank | Imports |
---|---|---|
China
21%
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1 |
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United States
13%
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2 |
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Argentina
7%
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3 |
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Germany
4%
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4 |
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Japan
3%
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5 |
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Trade structure by product
(% of total)
Exports | Rank | Imports |
---|---|---|
Oil seeds and oleaginous fruits
11%
|
1 |
8%
Petroleum, petroleum products and related materials
|
Metalliferous ores and metal scrap
10%
|
2 |
7%
Electrical machinery, apparatus and appliances, n.e.s.
|
Meat and meat preparations
8%
|
3 |
7%
Road vehicles
|
Petroleum, petroleum products and related materials
6%
|
4 |
6%
Other industrial machinery and parts
|
Road vehicles
6%
|
5 |
6%
Organic chemicals
|
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Low
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Medium
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Sensitive
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High
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Payments
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Court proceedings
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Insolvency proceedings
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Payments
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Court proceedings
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Insolvency proceedings
Given the length and cost of legal actions in Brazil, chances of obtaining enforceable judgments in a timely manner are low and it is preferable to consider amicable arrangements and specialist debt collection methods as a means to avoid domestic courts.
When it comes to insolvent debtors, use of the company rescue mechanisms is increasing; in practice, however, the chances of recovering debt remain extremely low.
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