Much like the US soccer team advancing in the World Cup despite a loss to Germany in yesterday’s game, Brazil’s economic outlook (regardless of the economic angst in recent years) seems to be catching a break as well - and it’s about time.
“Brazil still offers a significant amount of untapped opportunities in most sectors, especially in relatively faster-growing regions in the North and Northeast. Successful multinationals stress the need to focus on the long-term,” according to Pablo Gonzalez, Senior Analyst for Brazil after reading an article published by the FT.
FSG’s clients are encouraged to read further on how to make the case for Brazil, our latest report which identifies the opportunities and long-term factors that continue to make Brazil a good bet for multinationals. Also in the news lately is the rising cost of energy, a topic of recent concern given the unrest in the Middle East. The Wall Street Journal reports that higher oil prices are casting a shadow over emerging markets.
“Higher energy prices disproportionately affect emerging market consumers and economies. The increase in oil prices as a result of the rising political risk premium from the conflict in Iraq could spell trouble for emerging markets that are large importers of oil or already experiencing decelerating growth,” says Sam Osborn, Associate Practice Leader for FSG’s global analytics.
An example of impact follows Turkey’s recent decision to cut interest rates again.
“The interest rate cut will be helpful to local businesses but will fuel inflation. Rising energy prices because of the situation in Iraq are already affecting transportation costs, and the central bank will struggle to contain them with lower interest rates. As a result, MNCs can expect consumers to be squeezed for at least several more months,” says Martina Bozadzhieva, Head of EMEA Research at FSG.
However, Iraq is not the only concern:
THE expert on #MiddleEast economic dynamics thinks “#Iraq might be the least of the world’s worries” re: #oil prices http://t.co/I532ur8O6T
— Matthew Spivack, Practice Leader for MENA (@IMaSpiv) June 24, 2014
FSG clients should review more analyses of rising energy prices here.