Brazil Proves A Strong Market For Property Investors
Latin Americas largest economy, Brazil, is still attracting foreign property investors due to the positive economic data now emerging from the country.
The Brazilian Government has released economic data showing a 1.9 per cent increase in real GDP in the second quarter. This has led to Goldman Sachs and BNP Paribas revising their original growth forecasts upwards.
The Brazilian Finance Minister Guido Mantega stated that Brazil’s economy has rebounded from the global financial crisis. Brazil has defied analysts’ previous forecasts and the figures bode well for 2010. Analysts forecasts from July 2009 have increased from 3.5% to 4 %, according to a weekly central bank survey of about 100 economists. Analysts predict the economy to only shrink 0.16 per cent this year, down from 0.73% predicted in May of this year.
Mantega went on to say Based on positive trends in industry, real estate, services and employment rates, we project continued growth in the Brazilian economy next year. The result of GDP growth in the second quarter is without doubt excellent news” said Central Bank president Henrique Meirelles. “It shows that Brazil has already come out of a recession.”
The Brazilian economy has been helped by a surge in domestic spending, which increased 2.1% over last quarters figures and by a series of measures introduced by the Brazilian Government, chief among them the Minha Casa, Minha Vida scheme brought in to re-invigorate the domestic housing market.
Minha Casa, Minha Vida has provided an impressive R$60bn into Brazils affordable housing market, and with the construction industry accounting for 5 per cent of Brazils GDP this has given a valuable boost to employment and earnings.
The Brazilian Government announced that it would plow another R$10 Billion into its flagship affordable housing scheme, Minha Casa, Minha Vida in 2010. The key to this scheme is the Government providing subsidies of up to 90%, which keeps the buyers mortgage payments below 10% of their income. Mortgage payments are guaranteed by a Treasury fund.
The Brazilian economy is the latest, Group of Twenty economy to emerge from recession, following the French and German economies, which both posted growth of 0.3% in the same quarter.