G100(R) Brazil: Domestic and International Economic Scenarios / Credit, Consumption and Default Rates

SAO PAULO, Sept. 26, 2014 /PRNewswire/ -- This month's meeting of the G100® Brazil / Nucleus for Business and Economic Development Studies discussed economic scenarios as well as matters related to credit, consumption (consumer spending) and default levels.

Over the short term, the economic scenario in Brazil expects there will be external adjustments, with a drop in the exchange value of the BRL. The total average price of [Brazilian] exports will not go up through 2017. Fiscal adjustments are expected, with more taxes and less spending. In addition, there will be adjustments for inflation, with managed prices and a attempts to hold back interest rates. However, interest rates should remain high for an extended period, through 2015/2016.

The GDP is expected to start growing again in 2015, albeit slowly and starting from a low base. Inflation should slowly drop and interest rates may also drop. All of these projects are subject to uncertainties, such as: The economic policies of the new government; higher interest rates in the US; Crises in China or Europe; Geopolitical events.

The issue in Brazil is neither scale nor political stability. Brazil has the world's 8^th largest consumer spending level, and above average political stability. The problem in Brazil is Education. According to the outcome of PISA (Program for International Student Assessment), the quantity of education has increased in Brazil, but not the quality.

The problem of infrastructure in Brazil is very alarming; simply put, logistics are inadequate. Business operations face a number of hurdles. Brazil is ranked # 116 in the global "ease of doing business" list, far behind countries such as S. Korea (#7), Chile (#14), Mexico (#53), Russia (#92) and China (#96).

2015 will be a difficult year internationally, with a reduction in capital flows and less liquidity overall. It is the start of a super cycle of higher commodity prices. Brazil should grow around 2.6%. Even minimal growth requires stability (lower inflation, structured government debt and improvement in fiscal issues).

About G100® Brasil

G100® Brasil is made up of 100 members, all Shareholders or effective and appointed company CEOs. It brings together the preeminent leaders of our country, recognizing the results they have achieved in their careers in regard to developing society and its organizations. It is guided by the Alliances for Content, with FGV Fundacao Getulio Vargas and ESPM Escola Superior de Propaganda e Marketing, it has an ample network of Domestic and International Strategic Partners. http://www.grupoe3.com.br

Rodrigo Romero - CEO

MACOB Communications
Deborah Jacob - djacob@macob.com.br (+55 11 9.8925-4970)