Brazil and the pandemic, great potential for growth in the aftermath of the crisis

by Giacomo Guarnera*

Although in a context of economic crisis caused by the COVID-19 pandemic, which has also hit Latin America strongly, in Brazil some sectors still show significant growth and dynamism potential, such as the automotive industry, renewable energies, the entire telecommunications chain and in particular agro-business. This is accompanied by investments planned until 2023 of €70 billion per year to equip the country with.

Although in a context of economic crisis caused by the COVID-19 pandemic, which has also hit Latin America strongly, in Brazil some sectors still show significant growth and dynamism potential, such as the automotive industry, renewable energies, the entire telecommunications chain and in particular agro-business. This is accompanied by investments planned until 2023 of € 70 billion per year to equip the country with infrastructure.

Like Guarnera Advogados, we have seen over 700 Italian companies and operators in Brazil in 30 years of activity, which is why we are well aware that investing and doing business in this country is not easy. In my opinion, it is essential to establish yourself on the spot, as many Italian companies have already done, especially small and medium-sized companies able to transfer their knowledge and technologies, often associating themselves with local companies that know how to deal with brazilian bureaucratic difficulties.

Economic scenario in Brazil and growth prospects

Despite the pandemic and a panorama of international controversy, Brazil has launched growth projections at encouraging levels. In particular, the inflation rate fell by almost 3 points in the year 2019/2020 and GDP is estimated to grow, with already positive results throughout the territory, better in services and trade in the North of the country and with excellent performance in industry in the South.

Politically, meanwhile, the Brazilian Government is working on a structural plan to attract foreign investment on three main reforms: a reduction in public spending, simplification of corporate taxation and increased resources for local governments.

Opportunity and future for Italian companies Even

In times of crisis such as the current one there are opportunities to seize: this is the time to understand, choose and act for Italian companies in Brazil. Surely those who want to enter the Brazilian market must do so strategically and with a long-term perspective. It is a large hub that, thanks to Mercosul and other regional agreements, guarantees access to many other countries in the region.

Despite the country’s political problems, every day we see new Italian companies investing in Brazil with the aim of acquiring local companies that already hold permits and licenses. These companies can also seize, among other opportunities, the great potential represented by privatisations and the development of 5G technology. As recently told on the occasion of the talk “Brazil, the new frontiers of internationalization” promoted by VENTO&Associati, in the presence of Francesco Azzarello, Ambassador of Italy to Brazil and other illustrious guests, there are therefore great opportunities for Italian investors in the aftermath of the pandemic. The hope is that new talented resources and entrepreneurs will arrive in Brazil from the Italian peninsula who can bring with them their dreams, culture, customs and above all technological knowledge, helping to rebuild and support the human and economic development of this country, to start again together.

*by Giacomo Guarnera, Lawyer and Founding Member of Guarnera Advogados