Brazil’s biggest recent economic crisis has been a source of great difficulty to everyone. Never before have the 1300-plus German companies based there had to evince so much perseverance. Uncertainty may not have completely subsided yet, but caution is increasingly giving way to confidence.
After almost two years of stagnation and recession, positive economic indicators are increasing and the economy is again gaining momentum. Recently, stock market records have even been broken once again. Reforms in such matters as labour law are being adopted or are about to be implemented. In recent months, Brazilian companies have been able to decouple themselves from the political turbulence; the order situation in industry is once again improving. This creates a more favourable climate for the revival of consumption, and this in turn is increasingly tangible for German companies in the country.
But Brazil has not only demonstrated resistance to crises during this time, it has also regained its power to change. A radical transformation of the country has begun and will make this domestic market, with its nearly 210 million people, much more attractive and competitive in the future. Public awareness of a better growth and prosperity model is stronger than ever, and is calling for new solutions to key issues such as education, mobility and urbanisation. The fact that this transformation is meant in earnest is demonstrated by the unwavering fight against corruption.
Greater political stability is still essential, but the waters are gradually growing calmer. There are more indications by the day that the country is on its way to recovery. We are confident: Brazil can do it! That’s why we’re counting on the country’s recovery and looking forward to the upcoming German-Brazilian Economic Meeting in Porto Alegre in November 2017!
LADW Chairman and Member of the Group Board of Management of Volkswagen AG
Sunday Brief N°6
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