What to expect in 2022

Around the world, one of the great enigmas of 2022 is: what to expect from Brazil? The scenario is indeed challenging, but there are reasons for optimism.

As with most countries in the world, the Brazilian economy has suffered major impacts since the beginning of the pandemic and, over almost two years, has shown a significant slowdown in several segments. One of the main factors of concern is inflation, which is expected to be higher than expected in 2022, leading to an increase in interest rates set by the Central Bank.

The economic recovery that took place in 2021 is slowing due to fiscal and political uncertainties that have been worrisome throughout the year. Inflation, ending the year above 10%, and the high unemployment rate, with a considerable loss in real income, also contributed.

The year 2022, therefore, could be impacted by a more restrictive monetary policy here in Brazil and in the world to contain inflation, which is high worldwide. Higher interest rates inhibit the consumption of real estate, appliances and vehicles and leave credit for companies also higher.

Uncertain elections

The electoral scenario is another that has the potential to cause turmoil in the economy. With President Bolsonaro seeking re-election against former President Luiz Inácio Lula da Silva, the 2022 election is likely to be one of the fiercest in the history of Brazilian democracy.

Higher interest rates and political uncertainty will cause investment decisions by certain companies to be postponed until a better definition of the political and inflationary scenarios is outlined. This could actually slow the pace of growth in 2022.

On the other hand, several states have cash resources available with the help they received from the Federal Government during the pandemic and want to show service to guarantee a reelection of their executive. So, you can expect a lot of investment in infrastructure.

In the same vein, there is a prospect of private investments in infrastructure through public-private partnerships above R billion for 2022, with a business portfolio that includes concessions and privatization of ports, airports, highways, railways, among others.

The importance of a strategic partnership in Brazil

Faced with the challenging scenario, having a strategic partnership can prove to be crucial for success in the country. Gescon is a company specialized in BPO, which focuses on foreign companies seeking the best investment opportunities in Brazil. 

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