Brazil – A country of opportunities

21/04/23 Presentation title 1

21/04/23 Brazil – A country of opportunities

Brazil – A country of opportunities

Paulo Safady Simão CBIC Chair

National and international representative of employer associations in the construction and real estate industry

BRAZILIAN CONSTRUCTION INDUSTRY CHAMBER

26 States and Federal District

Highway Construction

Sanitation

Real Estate

Construction Segments

UNIONS, EMPLOYER ASSOCIANTIONS AND CHAMBERS

62 Associations


GENERAL INFORMATION

BRAZIL Brazil – A country of opportunities

RECENT GLOBAL FINANCIAL CRISIS

“The stability of the economy and of the country’s democratic institutions as well as frank dialogue between government and civil society were decisive in successfully confronting the crisis”

A development strategy based on investment and mass consumption (domestic market) was adopted; and ...

Monetary policyReserve requirementReduced interest ratesForeign trade (reserves)

Fiscal policyReduced taxes on productionInvestments in construction

Source: Ministry of Finance, Brazilian Central Bank (BACEN) and CBIC Database

ECONOMIC OUTLOOK

Economic stability;

Average growth of approximately 4.7% per year;

Growth driven by internal demand and by investments in infrastructure and housing;

Investments projected to grow by at least twice the rate of GDP in the coming 4 years;

Notwithstanding forecasts pointing to a renewed global downturn, domestic demand remains robust, international reserves and reserve requirements are higher than in 2008, and the fiscal situation is stronger.

GDP GROWTH RATES

Source: Brazilian Institute of Geography and Statistics (IBGE). Preparation and estimates by the Ministry of Finance.

In the period 2011-2014, the consolidation of investments (driven by construction) and increased domestic demand is expected to spur average annual economic growth of 4,7%.

MIDDLE CLASS ACCOUNTS FOR MORE THAN HALF OF BRAZILIAN POPULATION

Note: Monthly household per capita income by class at 2009 prices: Class A/B: more than R$ 4,800.00; Class C: R$ 1,115.00 – R$ 4,800.00; Class D: R$ 804.00 – R$ 1,115.00; Class E: up to R$ 804.00.Source: Getúlio Vargas Foundation/National Household Sample Survey. Prepared and estimated by the Ministry of Finance

Enhanced income distribution has added 29 million to middle class (Class C).

DISTRIBUTION OF ECONOMIC CLASSES IN BRAZIL (% POPULATION)

A MIDDLE CLASS NATION

Source: Getúlio Vargas Foundation/National Household Sample Survey. Prepared by the Ministry of Finance

COMPOSITION OF BRAZILIAN SOCIAL CLASSES (MILLIONS OF PEOPLE)

BRAZILIAN ECONOMY: FORECAST

* IMF ForecastSource: Brazilian Institute of Geography and Statistics (IBGE). Preparation and estimates by the Ministry of Finance.

GENERAL INFORMATION

CONSTRUCTION Brazil – A country of opportunities

THE CONSTRUCTION INDUSTRY IN CONTEXT

Represents approximately 20% of national

industrial output;

More than 2.8 million formal workers;

More than 170,000 licensed companies;

Accounts for nearly 41% of fixed investments

in Brazil.

Source and Preparation: CBIC Database.

GROWTH OF CONSTRUCTION INDUSTRY LABOR FORCE

Source: Annual Registry of Social Information/General Registry of Employed and Unemployed Persons (RAIS/CAGED), Ministry of Labor and Employment. Preparation: CBIC Database.

REAL ESTATE MARKET


REAL ESTATE MARKET

GROWTH IN REAL ESTATE CREDIT 2002 – 2011 (financing volume)28

Note: New and used unitsSource: Brazilian Central Bank (BACEN), Brazilian Association of Real Estate Credit and Savings (ABECIP), and Federal Savings Bank (CEF) – FGTS Channel. CBIC Database.

Source: Brazilian Central Bank and Brazilian Association of Real Estate Credit and Savings (ABECIP)

Brazilian Savings and Loan System (SBPE) – Agreements with more than 3 outstanding installments signed after 1998

HIGH QUALITY REAL ESTATE CREDIT

Mortgage Guaranty + Fiduciary Lien Fiduciary Lien

Source: Brazilian Central Bank (BACEN) and Brazilian Association of Real Estate Credit and Savings (ABECIP).Preparation: CBIC Database

REAL ESTATE FINANCING AS A PERCENTAGE OF GDP

Source: Brazilian Central Bank (BACEN). Preparation: CBIC Database

CREDIT TRANSACTIONS BY FINANCIAL SYSTEM IN 2009(AT THE HEIGHT OF THE CRISIS)

Steering of funds at low cost was decisive for maintaining credit levels at the height of the global crisis.

MY HOME, MY LIFE PROGRAM(PMCMV)


Disbursement of MCMV Program (R$ billion)

*Caixa Econômica Federal estimate.Source: Caixa Econômica Federal. Preparation: Ministry of Finance.

MY HOME, MY LIFE PROGRAM(PMCMV)

HOUSING NEEDS(millions of units)

Source: Civil Construction Industry Trade Union of São Paulo (SINDUSCON-SP), São Paulo State Federation of Industry (FIESP), Getúlio Vargas Foundation (FGV). CBIC Database.

ADDITIONAL GROWTH INDICATORS ...

5.81Cumulative shortage - 2009

23.492010 - 2022

INFRASTRUCTURE


Source: PAC2 Report.

WHAT IS THE PAC

It is a program of consistent investments aimed at meeting the

challenges of infrastructure.

?

GROWTH ACCELERATION PROGRAM

SECOND PHASE2011-2014

Source: PAC2 Report.

GROWTH ACCELERATION PROGRAM – SECOND PHASE

(R$ million)PAC Projects 2011-2014 After 2014 Total

PAC Better City 57.1 - 57.1PAC Citizen Community 23.0 - 23.0PAC My Home, My Life 278.2 - 278.2PAC Water and Power for Everyone 30.6 - 30.6PAC Transportation 104.5 4.5 109.0PAC Energy 461.1 626.9 1.088.5TOTAL 955.0 631.4 1.586.4

Organizes government measures and

supports private sector action over a 4

year period.

Develops an optimal environment to

enable the country to grow at a faster

rate through the execution of

infrastructure studies, projects, and

works.

Creates the conditions for addressing

the obstacles to sustainable

development.

GROWTH ACCELERATION PROGRAM

Stadiums

Urban Mobility

Ports and airports Environment

sanitationTelecommunications

2014 FIFA WORLD CUP


(R$ billion)

INVESTMENTS FOR THE 2014 FIFA WORLD CUP

Source and Preparation: Ministry of Finance.

2016 OLYMPIC GAMES

Stadiums

and arenas

Urban Mobility

Ports and airports

Environmentsanitation

Telecommunications


Note: The expansion of the Port of Santos and the construction of the Açu Port in Rio de Janeiro, the

largest venture investiment in port in Latin America.

Source: CG-LA ExameYearbook 2011-2012. Preparation: Ministry of Finance

Nine major projects of ports in the world (US$ billion)

PORT INVESTMENTS

Sixteen major transport projects in the world (US$ billion)

INVESTMENT PROGRAM IN TRANSPORTATION


High-speed train linking the cities of Rio de Janeiro, São Paulo and Campinas

(R$ billion and % of total)


Source: STN/Ministry of Finance. Preparation: Ministry of Finance

Airport concession: Planned investments (R$ billion)


Source: STN/Ministry of Finance. Preparation: Ministry of Finance

ENERGY

Subsalt;Clean Energy;Hydroelectric Plan;Oil and Gas.


Ten major projects in the Oil and Gas sectors in the world (US$ billlion)

INVESTMENTS IN THE OIL AND GAS SECTOR


Note: If plus ship-oil platforms whith building platforms the total value is US$ 40 billion.

INVESTMENTS IN THE ELETRICITY SECTOR

Fifteen major projects in the Eletricity Sector in the world (US$ billlion)

Source: CG-LA ExameYearbook 2011-2012. Preparation: Ministry of Finance

INVESTMENT FOR THE COUNTRY´S DEVELOPMENT AND GROWTH

Note: Updated in January 2012. Preparation: Ministry of Finance.

OTHERS BUSINESS OPPORTUNITIES

Investment in tourism; Commercial buildings –

shopping malls, warehouses for logistics;

Tecnological Innovation Program

Paulo Safady

Simão CBIC CHAIR


[email protected]: +55(61) 3327-1013Fax: +55(61) 3327-1393

21/04/23 Presentation title 40

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Brazil – A country of opportunities