Brazil Stays Steady
The republic’s modest growth is slower than the other BRIC nations, but “sustainable” as Advent continues to invest in the region.
June 25, 2009
Brazil has “achieved a balanced and sustainable growth,” according to Alessandro Teixeira, president of the World Association of Investment Promotion Agencies. In speaking at The New York Palace Hotel on Thursday, Teixeira said foreign direct investment into the Latin American republic in May was $2.4 billion, surpassing analysts expectations.
Though some reports indicate China and India are experiencing more rapid economic growth, Teixeira noted that this is a result of Brazil’s more developed economy. As sizable numbers of the nations’ residents move to the cities for better job opportunities, the BRIC nations struggle with the challenge of meeting their populations’ needs in rural areas and incentivizing them to stay in rural areas. “That is a problem Brazil has solved long ago,” Teixeira said.
“Brazil is a powerhouse in the three different sectors of agribusiness, pharmaceutical, and cosmetics,” he added.
On Thursday, Boston-based private equity firm Advent International invested R$280 million into Pitagoras Administracao e Participacao S.A., the holding company that controls Brazilian private education company Kroton Educacional. Of the R$280 million that Advent is investing into the company, R$220 million will fund a capital increase in Kroton. Advent will own a 50% stake in Pitagoras Administracao, and will indirectly own 28% of Kroton. ince 1997, the transaction is Advent's 15th investment in the Latin American country.
On Wednesday, the Organization for Economic Cooperation and Development said it expects Brazilian economic activity is forecast to decline by 0.8% in 2009 and rebound to 4.0% growth in 2010. The report predicted that China and India growth would slow in 2009, but would experience a stronger recovery in 2010; projections in China were expected to rise 7.7% in 2009 and 9.3% in 2010, while growth in India is predicted at 5.9% in 2009 and 7.2% in 2010.
Earlier this month, BRIC nations met in Russia for the group’s first major summit, where the nations discussed their individual economic and political goals.
Calls to Advent were not returned by press time.
For more information on related topics, visit the following:
