News: Brazil Darling of the pink pages

Fri, 07 Sep 07

Forget the travel and property writers; it’s the financial analysts that can’t get enough of the Brazilian success story...

Jim O’Neill, Head of Economic Research for Goldman Sachs, invented an entirely new acronym in 2001, BRICs, standing for Brazil, Russia, India and China, just so that he could track their phenomenal growth.

In his 2006 research document, O’Neill believes that by 2050, the BRICs economies will grow so large that they will each become members of the largest economies in the world. Collectively, he predicts that the four BRICs economies will become bigger than the aggregate size of the G7 (France, Germany, Italy, Japan, UK, Canada and the USA), also by 2050.

BRIC economies set for peak growth

If people dismiss his reckonings as the stuff of dreams, O’Neill cites the fact that their influence is already being felt on the world. Over the past five years more than a quarter of world growth in US dollar terms has come from the BRICs economies.

The next decade will become the peak of growth for the BRICs according to O’Neill. He believes that the middle classes in the BRICs nations will grow four-fold over the next decade and that Brazilians will be buying more new cars than each of the other G7 countries except the USA.

The BRICs countries have really captured the general publics’ and the investors’ attention and O’Neill concludes by saying that over the next 45 years, if the four pursue good economic policies, their economies collectively could become the biggest in the world and if you have invested in the BRICs dream, you will almost definitely see “pretty spectacular” returns.

Hot on Brazil

When looking at property investment in Brazil, global investment bank, the Lehman Brothers are singing from the same hymn sheet as Goldman Sachs, noting that: "currently, prices for desirable properties across the country are artificially low and this gives an investor a chance to buy in now and profit well in the short term or hold for long term appreciation and/or income generation.

Lehman Brothers continued: “We're truly hot on Brazil right now for the above highlighted reasons, and we would recommend Brazilian property assets be held as part of a diverse portfolio of assets". And with Luiz Inácio ‘Lula’ da Silva’s recent re-election for the 2007 -2010 presidential term, the continuing success of government reforms is now guaranteed.

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