Fitch Ratings Agency, have recently confirmed their confidence in the Brazilian banking sector by announcing the outlook for Brazilian banks return to loan growth is highly positive for 2010.
The ratings agency highlighted that as banks release results for 2009, there is a clear indication that loan growth is in line with local economic growth. Brazil continues to go from strength to strength with Fitch projecting the Brazilian economy to grow by 5.5% in 2010. Such a rate is above the average of Latin America as a whole.
Fitch also commented that the Brazilian banking system had demonstrated great resilience whilst the economic downturn took hold across the globe. The solid policies and prompt response of regulators and government clearly aided Brazil’s swift recovery. Bank credit ratings have stayed remarkably stable during this period and are expected to continue on this trajectory throughout 2010.
Such recognition from the ratings agency in the strength of Brazil’s banking system will only bolster investors’ confidence. The expected growth in loan availability and accessibility is also encouraging news for those investors looking to leverage any property or land investment in Brazil.
Brazil’s Economic Growth Strong
Results for quarter 4 2009 have revealed that Brazil’s economy grew in line with expectations, recording 2% GDP growth from Q3 to Q4 2009, according to Brazil’s national statistics agency in Rio de Janeiro. This records the fastest quarterly economic growth for Brazil in 2 years. Year-on-year GDP growth to Q4 2009 shows an increase of 4.3%. Forecasts for Q4 growth were 2.1% whilst the average year-on-year estimate was 4.4%.
This latest encouraging news from Brazil is further evidence that the country is fast becoming a paragon of economic stability and prudence. Forecasts for 2010 economic growth are equally encouraging.
RBC Capital Markets Inc. announced their forecast growth of 6% for Brazil’s economy during 2010, with an average 4.5% growth over the next 5 years. Nick Chamie, Head of Emerging Markets Research at RBC, said “Brazil is about to embark on a ‘growth miracle’ for the next 5 years”
And they are not the only industry professionals singing Brazil’s praise. A survey of 100 analysts published by the Central Bank on March 1st has stated that the Brazilian economy will expand by 5.5% in 2010.
Source: Fitch Rating Agency, Reuters UK, Reuters US, Bloomberg, Business Week
Visit: www.fdi-ecocitybrasil.com
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