1 Development and investment prospects for Brazil Brazilian American Chamber of Commerce Washington, October 10 th 2014
2 Guide Growth prospects: sources of dynamism Investment forecast The role of BNDES Brazil: opportunities and challenges
Social achievements: a very relevant source of dynamism 70 65 HOUSING GROWTH Millions units 120 Airline industry, in million passengers 115 60 55 50 45 40 35 30 2002 2003 2004 2005 2006 2007 2008 2009 2011 2012 2013 100 80 60 40 20 0 48 Sources: IBGE/ PNAD and ANAC. 100 90 80 70 60 50 40 30 20 10 - Internet access (household users and household connections), in millions household users household connections 2007 2008 2009 2011 2012 2013 3
Agriculture and oil markets: sources of dynamism in export market 4 AGRICULTURAL PRODUCTIVITY
Infrastructure: attractive opportunities & a decisive source of dynamism Expanding Infrastructure Investments - % of GDP 2.54 2.41 2.30 2.14 2.60 The evolution of infrastructure cycles (R$ billion, prices of 2013) Energy Forecast Logistics 1.92 1.47 1.64 1.67 1.67 1.31 Sanitation 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 The economic impact - investment forecast (% GDP) End of 1 st Telecom cycle Beginning of Energy cycle Beginning of Logistics cycle Project modelling by BNDES & independent private & multilateral partners 23 5 5 4 Source: BNDES, ABDIB and IBGE. without concessions with concessions Structuring (- 3yrs) Structuring (+ 3yrs) Concluded Projects Suspended Projects Estimated Capex of 30 projects: US$ 25 billion. 74% with 3 or + bidders 5
Our drive: dynamism must be translated into welfare (in this slide, obviously through a simple, insufficient summary indicator) 6 GDP per capita, R$ thousand, (2013 prices)
7 Guide Growth prospects: sources of dynamism Investment forecast The role of BNDES Brazil: opportunities and challenges
Investments: support to & in itself a source of dynamism If BNDES forecasts are on the right direction 8 BNDES investment forecast 2014-2017 SECTORS - avg 2013 US$ bi 2009-12 2014-17 Accumulated % Variation Growth rate (linear avg; % per year) INDUSTRY 407.9 534.4 31.0 5.6 INFRASTRUCTURE 197.4 266.5 35.0 6.2 HOUSING 329.5 401.8 21.9 4.0 AGRICULTURE & SERVICES 534.9 685.0 28.1 5.1 TOTAL 1,470.2 1,887.7 28.5 5.1 Source: BNDES Industry & infrastructure: based on evaluation of corporate projects; Housing & agro & services: econometric estimates Previous investment forecasts: less than 10% of error (downwards )
Industry: oil& gas will continue to be relevant + manufacturing for local and export markets BNDES industry investment forecast, 2014-2017 Average 2013 US$ billion 2009-12 2014-17 Acc. % change Growth rate (linear avg; % per year) INDUSTRY 407.9 534.4 31.0 5.6 Oil & Gas 147.4 226.2 53.5 8.9 Mining 23.2 25.0 8.0 1.6 Automotive 21.3 34.3 60.9 10.0 Paper & Pulp 8.3 12.1 44.4 7.6 Chemical 9.7 12.1 23.8 4.4 Steel 17.6 7.4 57.9 15.9 Electronics 9.7 11.1 14.3 2.7 Health 4.6 6.0 30.0 5.4 Aircraft 1.9 6.5 250.0 28.5 Other Industries 164.1 193.7 18.1 3.4 Source: BNDES 9
The time has come for logistics, telecom and urban infrastructure 10 BNDES infrastructure investment forecast, 2014-2017 Average 2013 US$ billion 2009-12 2014-17 Acc.% change Growth rate (linear avg; % per year) INFRASTRUCTURE 197.4 266.5 35.0 6.2 Electricity 81.6 89.0 9.1 1.8 Telecommunications 44.0 57.0 29.5 5.3 Urban Infrastructure 22.7 41.2 81.6 12.7 Highways 25.5 29.2 14.5 2.8 Railways 13.4 26.4 96.6 14.5 Ports 7.0 19.0 173.3 22.3 Airports 3.2 4.6 42.9 7.4 Source: BNDES
11 Guide Growth prospects: sources of dynamism Investment forecast The role of BNDES Brazil: opportunities and challenges
BNDES contribution to investment 13.614 19.292 23.583 33.314 49.536 68.260 95.678 82.910 79.808 88.255 81.815 5% 4% 3% BNDES disbursements & Investments as % of GDP Disbursements/GDP (left) GFCF/GDP (right) 20% 19% 18% 2% 17% 1% 16% 0% 15% BNDES disbursements (current US$ billion) *12 months, up to June/2014 *12 months, up to June/2014 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 * 12
Financial performance: sustainable, profitable growth 13 66 61 61 Shareholder s Equity (BRL bln) 50 25 25 28 2007 2008 2009 2010 2011 2012 2013 0.20 Default Rate (%) 0.11 0.15 0.15 0.14 0.06 0.07 0.01 2007 2008 2009 2010 2011 2012 2013 2014 (1st Sem)
14 International strategy: support to Brazilians & its own financing Guidelines Support Brazilian exports Foster internationalisation of Brazilian firms Strengthen BNDES funding Attract institutional investors & FDI Acquire know-how to help develop the Brazilian financial industry Institutional representation BNDES Uruguay Montevideo (2009) Subsidiary BNDES PLC London - UK (2009) International Offices BNDES Africa Johannesburg (2013)
15 Guide Growth prospects: sources of dynamism Investment forecast The role of BNDES Brazil: opportunities and challenges
16 Efficiency and quality for sustainable growth The XXI century has seen significant progress in Brazil. At this time & age, macroeconomic and development fundamentals are in place to trigger off a process of long term sustainable growth: Macroeconomic performance is, fundamentally, correct. In the domain of macroeconomic policy fine tuning is a constant endeavor, everywhere and, in the case of Brazil, very much within the reach of policy-makers, Brazil has evolved towards diversifying its sources of dynamism: exports, internal market and infrastructure combined provide attractive demand prospects & opportunities that will benefit citizens, firms, investors and financiers. But relevant challenges must still be overcome: Fair opportunities for all and less inequity, Absorption & consolidation of the emerging middle classes, Increases of capabilities and efficiencies of all, More private financing investments.
17 Brazilian American Chamber of Commerce Washington, October 10 th 2014