Brazil is a curious country, sometimes more curious than a lot of other places. It has an image and promotes it but not always in an effective manner with the desired results. Guido Mantegna the economic czar (Ministro de Fazenda), for example, stated that Brazil would grow at 4 percent during 2012. Official data now show that the economy actually grew less than 1 percent. A lot of people are distrustful. Nevertheless, if you are on the ground in Brazil it appears that the economy is growing and growing more than the official statistic.
There are numerous blogs, press reports and critics who say that Brazil is headed for an extended period of low growth an high inflation. An example is the article in The Economist this week.
Personally, our feeling and experience is that a business will grow (or shrink) independent of the macro economy. Obviously, there are linkages but few businesses perform at the average or at the rate of the overall economy.
Traditionally, we move in Brazil between peaks of optimism and pessimism. Right now we are in the optimistic phase and a lot of businesses are still doing quite well. Unemployment remains at a near all time low and the new consumers are in the market. They may not be paying all their bills but they are paying something. That’s typical and it has been typical for a long time.