Brazil is in difficult times. Its economy is struggling, the country’s currency has flopped in the aftermath of the Trump result and the country is in one of its deepest recessions. While its football team looks to be firmly on its way to the 2018 World Cup, it’s fair to say Brazil has lived through more prosperous times.
But change is afoot. I’m going to hedge my bets a little bit here, but, I think we could expect to see signs of growth in Brazil’s forestry industry in the coming months. Here are a couple of reasons why.
Since coming to power just six months ago, Brazil’s President Michel Temer has made waves. Or at least tried to. He didn’t come in in easy circumstances: he replaced impeached former President Dilma Rousseff during volatile political times for the country. But, since then, he has attempted to introduce packages and stimulus to get Brazil’s economy and industry moving again.
Signing co-operation agreements with Japan and India, with a particular focus on agriculture.
Having Brazil’s central bank cut the country’s interest rate for the first time in four years – 14 per cent from 14.25 per cent, to drive the economy.
Boosting forecasts for GDP. At the start of Temer’s reign, projections for Brazil’s GDP growth for 2017 were 0.5 per cent. Now they’re at 1.2 per cent.
It’s early days, sure, but Temer has started strongly.
With forestry being one of Brazil’s richest industries, go here if you’d like more information on investing in timber there.
Latin America’s strongest economy
We should not forget that, by some distance, Brazil’s is the strongest economy in Latin America. Growth might be modest, but at least Brazil is weathering the storm. Unlike other countries, it is not in severe deterioration. It’s bad, yes, but not that bad.
Analysts say yes
Okay, so some say we shouldn’t pay heed to experts, but I think they know what they’re talking about, don’t you? Brazil’s top minds have been getting out and about recently, reminding the world that Brazil is ripe for investment.
For example: Brazil politicians attended an event at London Business School last month, talking up the country’s prospects and backing Temer’s reform package. Fernando Bezerra, Brazil’s mining and energy minister, said the government was keen to secure private investment for 34 infrastructure, oil and gas projects across the country.
“We are betting that the Brazilian economy will recover soon and it’s already showing signs,” he said. “We’re optimistic that the market will recognise our efforts.”
Brazil’s forestry sector is concrete
The country’s forestry and timber industry is not an emerging one: it’s a central plank in Brazil’s economy and regarded by the government as a major component of the financial success and stability of Brazil. By June 2012, Brazil had 7.74 million hectares of certified forest.
This South American country is home to the third-largest remaining frontier forest on the planet, making up about 17% of the world’s frontier forests, and it has the highest biodiversity in terms of the plants that these forests accommodate.
So not only is the forestry industry one of Brazil’s most successful – the government also recognises its importance, and, one would hope, will do everything it can to keep it strong.
I for one will be keeping a close eye on forestry investment in Brazil in 2017.