Are You Ready for 2020? The Opportunities For Brazil and Canada
By Sergio Frias – FCBB President
Hello FCBB friends,
One more year is gone, and I am excited about the possibilities for 2020.
2019 was not an easy year by any stretch of the imagination, but clearly it has been better than the challenging 2018. I would call 2019 as a transition year.
There is, of course, a transition between two fundamentally different types of government, with different ideologies, but this is only as important as its impact on the short, mid and long term implications to the economy and wellbeing of the population in Brazil.
The economy is growing, but at a much slower pace than expected (Projected GDP at 1.1%) and needed to quickly change the scenario of unemployment, with over 12 million people without a formal job (11.8%), however the 3.27% inflation rate (last 12 months) and the benchmark interest rate (prime) at its historic low of 4.5%, are significantly improving the availability of credit and as a consequence, a few sectors of the economy are already feeling a rebound on the demand, such as automotive (11.6% increase in sales) and construction (more than 100.000 job positions opened on the first 8 months of the year).
The bulk of the impact will likely be seen in 2020. The projected GDP for next year by various sources varies between 2.0% and 2.5%. The stock exchange keeps going up, at over 112.000 points (its all time high), being consistently above 100,000 points, which used to be an unsurpassable mark until 2018, showing huge confidence of the market on the future, which is supported by the reduction of the Credit Default Swap (country credit risk) to its lowest level since 2012, at 100.25 points.
For 2020, there are various opportunities for investment such as on the energy market, particularly clean energy and infrastructure with the continued effort for privatization and its historical gap to the country’s demand. The ever improving productivity indexes of the agribusiness and the huge potential of growth in technologies via innovation present by themselves great opportunities as well.
Brazil has the second highest average time on the internet for about 76% of the population of 210 million people, being almost 40% of these people considered early adopters of technologies / digital apps. The over 40% CAGR of venture capital into Brazil for the last 5 years allowed Brazil to be included in the rank of leading countries on the count of Unicorns (startups with private investment over US$1bn, or IPOs with a market cap above US$1bn).
Important to mention that 76% of Brazilian job positions are in micro and small enterprises, which is equivalent to 27% of Brazil’s GDP and the number of microentrepreneurs grows at a rate of more than 14% per year over the last 5 years. During the same period, the number of FinTechs had a CAGR of over 96%, which demonstrates how vibrant the market for technologies is and how much more it can become in the near future.
The elections took place and not much changed. In Ontario the Progressive Conservative Party in power is shaking things a bit, requiring some accommodation to the changes implemented, while the Liberal Party in power on the Federal level, did not deliver to the promise of making the economy run faster, which, however, did not affect its ability to be re-elected a couple of months ago.
None of this however changed the scenario where Canada remains at its position of one of the 20 most competitive and innovative countries in the world, with AAA credit rating, unemployment rate of 5.9% and inflation at 1.9%, which coupled with the historical stability of its institutions, makes Canada the 22nd best country to do business in the world.
For 2020, the startups’ ecosystem might expect to continue growing, creating and developing great opportunities for entrepreneurs, with a very stable environment for new businesses to thrive.
Here at FCBB the year 2019 was a year for us to reinvent ourselves. The significant reduction of business opportunities presented in 2018 and partially in 2019 allowed the team to focus on its internal capabilities, growing the team and creating a very robust organization, with much better processes and systems to manage knowledge and to support the FCBB delivery of its value proposition of connecting Customers and Partners to the development of business opportunities between Brazil and Canada.
This year FCBB decided to officially widen its scope of services to include a most needed support to activities connected to the wellbeing of the Brazilian community in Canada. FCBB was a community partner in a number of events over the course of the year, helping to promote, organize and even host important cultural, entertainment, wellness and business events targeted to the Brazilian community.
For 2020 we will have even more attention to sustainability, social work and Brazilian cultural initiatives. Just wait and see.
FCBB would like to thank all our Partners, Customers and mainly our incredible team of volunteers, who made this year a very successful one but helped to prepare FCBB to have an even better 2020.
Let the new year come!
We wish you all a great Holiday Season and all the best for 2020.