Economic activity - The Political and Institutional Panorama
Transcrição
Economic activity - The Political and Institutional Panorama
Economic Outlook 2015 A prospect for recovery March/2015 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Index • Brazil as a global player • Political scenario • Economic scenarios − − − − − − − − − − − 2015 Key-points Economic activity Income and wages Foreign sector Money market Financial market Public sector Investments Agriculture Industry activity Services • Global scenarios − USA − Europe − Latin America − China − India − Russia − Japan − Southeast Asia − Commodities Note: All decimals are described in the Brazilian format. So in this presentation the use of “.” to represent thousands, instead of “,” which represent decimals. A country with resources “Your ancestors must have pleased God that he has given you so much. I envy you” Zhao Zhyang, Chinese Prime Minister in 1985 on his visit to Carajás mine, delighted with the abundance of natural resources in Brazil. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Brazil as a global player 4 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. • USA, the highest nominal GDP in US$ globally, representing 25% of the total. Brazil as a global player Economic activity • China now accounts for 14% of the total, also appearing as the highest GDP PPP (purchasing power parity) today. Nominal GDP US$ Billions 2014 2 • EIU forecasts indicate that China will overtake the US by 2050 also in Nominal GDP 17.404 1 10.366 3 4.613 4 3.827 5 2.985 6 2.852 7 2.249 8 2.159 9 10 2.158 • Brazil lost the 6th position as the world's largest economy in 2013, and remained as the 7th also in 2014. EIU indicates that in the next two years India may surpass Brazil • Canada, which appears as the 11th among the largest economies, is expected to overtake Russia in 2015 due to the unstable scenario in the European country. 1.959 71.543 Source: Research – Deloitte (based on EIU data.) 5 • Even with the current unstable political or economic situation, the IMF holds the prospects that Brazil could become the 5th largest economy by 2050. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Social indicators Brazil as a global player 92,5% of illiteracy rate Natural resources 74 years Position in the global production ranking Agriculture 1st 1st 23rd Wheat 1st Sugar cane 1st Maize 3rd Beef Coffee Soy Water resources Oil and gas Mining 3rd Iron ore 12nd Oil 1st Renewable resources 1st Niobium 34th 10th 3rd Drinking water 11st 6 Gold Natural gas Shale gas 112 Production of minerals, oil and gas reserves, potential water resources nd Sanitation Life expectancy 8,5 million Km2. 7% of the entire global territory Gini Index 203 million people, 3% of global population 5th 51,9 154th total ranking highest globally 0,74 HDI 79th total ranking SWOT S Largest player in commodities, agricultural products and basic manufactured goods. W America's second largest economy. O Diversification in the export tariff and new business partners; Investment in alternative fuels. T Low productivity Large deficit in infrastructure Social issues still lossmaking. Instability in China; Fall in the commodities prices Investor distrust. Source: IMF, CIA World Factbook, US Geological Survey, ONU, FAO, IBGE, Bacen and EIU. Last available data. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Political scenario 7 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Political scenario President Dilma Rousseff was re-elected with 51.6% of the votes taking the Workers' Party (PT) for the fourth term in a row and will turn 16 years in front of the Brazilian federal government. However, the end of the first term of the President was followed by harsh criticism of the conduct of economic policy (Gross Domestic Product of the country had an average growth of 2% per year between 2011 and 2013, the lowest level since Collor’s government in the beginning of the 90’s). Since 2013, the President had a strong fall in popularity and has seen numerous protests in major Brazilian cities. Some of these protests have specific demands as price adjustment for urban transport. However, there is a widespread perception of society about the dissatisfaction of the political leadership in general demanding "deeper“ political reforms. Therefore, PT assumes a fourth term with many challenges not only in the economic but also the political and social scene. “Political Reform” Key-word in the social demand 8 Return of the Macroeconomic Tripod Adjustment over public accounts Return of inflation to the target center Adjust the external accounts Continued social policies Continued wage recovery Investment in infrastructure - PAC 3 Policies for Education incentive Fighting corruption Reform and tax policy Economic stability Economic tripod Inflation target ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic scenario 9 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. 2015 Key-points 10 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Searching for better transparency and fiscal control; Best management practices of public and private companies; Maintenance of the "economic tripod" (foreign exchange, inflation, fiscal). Business Key-points Rising food prices; Project prioritization Market confidence Increase in the cost of electricity; Steady increase in social and economic demand in infrastructure. Water scarcity; Tax adjustments. Infrastructure demand Inflationary pressure Key-points for 2015 in Brazil Inflation target and expected increase in the US interest rates. Increased basic interest rate Shortage of man-power; Maintenance of consumption; Pressure on prices. 11 Low unemployment rate Falling commodity prices The lower demand from China, India and Europe will require greater efforts of large national companies to keep their sales; Market value drop of exporting companies and lower liquidity for the stock market; Need for new business partnerships. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic activity 12 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic activity Real GDP % Variation – end of the year Gross Domestic Product 7,6 After a slow growth of the Brazilian economic activity, the market remains pessimistic for the coming years. 6,0 5,0 4,0 The expectation is that 2015 remains on stand-by, waiting for the government responses in the first quarter compared to the steps to be taken regarding the economic support. 10 8 0,4 -0,2 5 7 11 Nominal GDP 1,1 1,4 1,7 7,1 6,5 6,0 5,6 5,2 4,8 4,4 4,1 3,7 3,2 3,0 2,7 2,4 0,9 1980 1990 2000 2005 2010 2015 2020 2030 2050 US$ Trillions R$ Trillions 2,1 16 13 0,1 2,5 2,0 1,8 1,0 Thousands 9 7 2,3 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Position of Brazil among the largest global economies - Nominal GDP 7 3,9 Exchange rate devaluation 1,6 2,1 2,5 2,2 2,2 2,2 2,3 2,4 2,5 2,7 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Research-Deloitte (based on BACEN, Focus, EIU and IMF). 2015-2018 forecast. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic activity Consumer price index The price of food and housing in the country were the hardest hit by the inflation increase. Agricultural commodities and manufactured goods also had a significant price increase in the transfer to the consumer. The fight against inflation in the country, without a deterioration in interest and public sector, will be the main challenge of Dilma during this year. All that is conducive to sustainable growth in the medium term. Inflationary % Variation over goods and services Education 10 IPCA inflation target Food % var. p.y. 6 2 Health Household goods Larger inflationary trend 4,5 5 0 5,9 6,5 5,8 5,9 2012 2013 6,4 6,5 5,7 5,5 5,5 2016 2017 2018 4,3 4 -2 3 Communication 2 -4 -0,2 0 0,2 0,4 0,6 0,8 % var. p.m. (dec) Volume of the bubble based on the average % price variation in the last 3 years 14 5,9 6 Transports IPCA % 8 7 Clothing Inflation Meta datarget inflação Lower limit Limite inferior 9 8 4 Limite superior Upper limit 10 Consumption Household 1 3,1 1 0 2006 2007 Source: Research-Deloitte (based on Central Bank and IBGE data). 2015-2018 forecast. 2008 2009 2010 2011 2014 2015 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic activity Real interest rates Relation between Selic rate and Price index (IPCA) - % Interest rates The main instrument to combat inflationary growth are the interest rate, relied on the orthodox economic tripod. Inflation reach the goal, decrease on interest rates Inflow of foreign capital 11,6 For 2015 the focus is to increase the Selic gradually during the year, which together with the reduction of public spending, may reduce at medium term the rising inflation in the country. 7,2 6,3 Inflationary “boom” 5,5 5,4 5,0 14 13 12 11 10 9 8 7 12,75 10,75 2007 2008 2009 2010 2011 2012 2013 10,50 9,75 2011 2014 12,50 2012 Source: Research-Deloitte (based on Central Bank and IBGE data). 2015-2018 forecast. 4,6 4,3 2015 2016 2017 2018 12,50 12,00 11,75 11,38 9,00 8,50 2010 5,4 2,4 12,00 8,75 2009 15 2006 9,50 10,25 5,6 3,8 1,3 Interest rates - Selic % Variation – end of the month Speculative expectancy of falling rates with Levy's entry in Central Bank 7,25 2013 2014 2015 2016 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic activity Exchange rate With the economic growth in mid-2010, the results of currency appreciation caused a major incentive for inflow of foreign currency, leading to an expectation of less than R$/US$ 1.80 for 2014. But with the current unstable political and economic environment, the real depreciated, and closed the year at R$/US$ 2.66. Country Risk – EMBI+ 700 Base points 600 12/31/2014 500 400 300 200 100 Exchange rate 3,25 3,00 R$/€ 2,75 2,50 2,25 2,00 R$/US$ 1,75 1,50 16 Source: Research-Deloitte (based on Central Bank, JP Morgan, EMBI +,IBGE). 2015-2018 Forecast. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic activity International reserves International reserves US$ Billions, end of the year Lower expectative among foreign market. Fall in commodities exports Reservas Internacionais US$ Bilhões, no final de cada período 379 352 376 379 Empréstimos do FMI FMI Loans International reserves Reservas Internacionais 25 28 2014 2015 374 180 86 194 2006 2007 194 239 239 289 54 86 28 54 25 28 21 2002 2003 2004 2005 17 377 21 17 17 374 289 352 180 21 376 21 2008 2009 2010 2011 2012 2013 28 Source: Research-Deloitte (based on Central Bank and IBGE data). ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic activity Financing the economy Without enough domestic savings to finance investments and promote the growth of national activity, the borrowing requirements of the Brazilian economy almost tripled, from R$ 56.9 billion after more controlled results of the financial crisis in 2009 to R$ 217.2 billion in 2014. National economy net lending R$ Billions Savings / GDP (%) (right axis) 50 Net lending (R$ Billions) 27,3 0 -50 -50,1 -56,9 -100 -150 -200 -250 2000 18 2001 2002 2003 2004 Source: Research-Deloitte (based on Central Bank and IBGE data). 2005 2006 2007 2008 2009 2010 2011 2012 -233,6 2013 20 19 18 17 16 15 14 13 12 11 10 2014 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic activity National treasure Government expenditures on personnel, social programs, investments and administrative costs exceeded revenues in 2014 at R$ 17.2 billion. With the push of the electoral calendar, expenditures were accelerated and reached R$ 1.03 trillion; the tax revenue, hampered by the weakness of the economy and tax relief measures, reached R$ 1.01 trillion. The data, resulting in a treasure deficit, should significantly impact the public debt level over current GDP Income and expenses of the National Treasury R$ Billions Net revenue Total expenses Public debt over GDP - % 1.100 1.000 900 800 700 600 500 400 300 200 100 100% of GDP 65 63 61 59 57 57 53 54 2006 19 64 64 64 2007 2008 2009 2010 Source: Research-Deloitte (based on National Treasury and EIU data). 2011 2012 2013 2014 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Transformação Adm., saúde e educação públicas Outros serviços Comércio Ativ. Imobiliárias e aluguel Agriculture Financial services Civil Construction Transports 4%2% 19% 4% 4% Eletricity, 5% water and gas IT 6% 15% 7% Mining 9% 12% 13% Economic activity GDP Composition - Supply perspective • The services sector remains the main thread from the supply perspective in current GDP. • Over the past 10 years, the participation increase of other sectors, Agriculture and Industry were minimal. • The service sector represents about 70% of the Brazilian GDP, fueled mainly by trade, retail and public activities. • • • • 20 GDP¨% Composition by activity(*) 2004-2014 Transformation Health and public administration Other services Trade Real estate Agropecuária Intermed. Financeira e seguros 4% 2% 4% Construção Civil 19% Transportes, armazenagem e correio 4% Prod. Distrib. Eletricidade, gás e água 5% Serviços de Informação Extrativa Mineral Individually, the main activity that adds the most value in the Brazilian economy changed in the last ten years. We can perceive a clear drop in the share of manufacturing in the Brazilian GDP in the last 10 years. 6% 2% 4% 13% 5% 18% 7% 15% 7% Which also shows the increased participation of public services; rising from 15% to 18% The share of trade increase 1 pp. 2% 5% 6% 9% 9% 2004 13% 12% Source: Research-Deloitte (based on Central Bank, EIU and IBGE data). (*) Exempt of taxes and adjusted to 2014.. 2014 16% 13% ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic activity GDP Composition – Demand perspective • • GDP % Composition by activity 2004-2014 GDP can also be seen from the demand perspective. Indicating how much the country has spent to structure their own economy. Taking into account household consumption, government consumption, investment (calculated by gross capital formation), and the Trade Balance, we can see that just as in the supply situation, population consumption is the "driving force" of the economy also in demand. • It is important to note the increase of 2% (or US$ 750 million) in government spending (from 19% to 21%) during the last 10 years, focused especially in social programs. • The rest of the matrix composition continued virtually unchanged if analyzed during 20042014. 4% 16% 17% 19% 2004 21 Consumption Government Investments Exports Imports Source: Research-Deloitte (based on Central Bank and iBGE). Quarterly national accounts adjusted for 2014. 60% 21% 10% 13% 14% -1% 15% 60% 2014 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Economic activity GDP Composition - Regional The Southeast, and more specifically the state of São Paulo, still is the main driving force of the Brazilian GDP. Regional growth evolution Index: 2006 = 100 Representing 55% of the total of contributions from all the States. 220 However, in a period of 10 years, we can see the strong growth in the Northeast region (raw numbers), and in both North and Centre-West (transformed into a base index 100). This strong growth is due mainly by the arrival of large companies in these regions and increased investment in both infrastructure focused on creating economic hubs within regions. 200 180 160 9% 5% Regional GDP % Composition 10% 5% 140 Southeast 13% South 120 14% Northeast 56% Centre-West 2006 2007 2008 2009 2010 2011 2012 North 17% 16% 2002 22 100 55% 2012 Source: Research-Deloitte (based on Central Bank and iBGE data). National Accounts data. 2012 = Last data available. North Northeast Southeast South Centre-West ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Income and wages 23 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Nominal average income End of the year - R$ Income and wages 2.122 Unemployment and wages 1.967 1.850 The unemployment rate in the Brazilian economy has been showing decline since October 2003, reaching its lowest level in 2014 (4.3%). 1.623 1.515 1.282 This has helped minimum wage appreciation policy that has been adjusted since 2005 according to GDP variation during the period. 1.011 1.086 1.344 1.162 874 862 908 Unemployment rate in Brazil End of the year (%) 10,5 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Minimum wage End of the year - R$ 10,9 788 9,6 622 8,3 8,4 7,4 6,8 6,8 287 240 260 5,3 5,2 4,6 4,3 373 461 724 544 4,3 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 24 338 409 510 678 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Research - Deloitte (based on Central Bank and iBGE). Note: Corresponding data from the metropolitan areas of Salvador, Recife, Belo Horizonte, Rio de Janeiro, Porto Alegre and Sao Paulo. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Income and wages Economic classes Among the income indicators, the main highlight is 50,0% the increase of population in the middle lasses. The C and D class increased from 42% to 48% in 9 years. While the population within income classes A and B also increased. The share rose from 13% to 15% between 2005 and 2014. Population in each economic class % breakdown 48,4% 47,7% 48,0% 23,3 46,7% 45,9% 46,0% 44,9% 44,9% 21,3 44,5% Euromonitor Methodology: A/B Classes – % breakdown of people with a gross wage of up to 150% of the average worker. C/D Classes – % breakdown of people with a gross salary between 50% and 150% of the average worker. E Class – % breakdown of people with a lower gross salary 50% of the average worker. 44,0% 42,0% 43,8% 43,7% 43,3% 42,4% 42,7% 42,6% 42,3% 42,0% 43,0% 41,7% Source: Research - Deloitte (based on Euromonitor data). 43,2% 43,5% 44,0% 19,3 17,3 40,0% 13,8% 13,9% 13,4% 13,5% 13,6% 14,2% 15,2% 15,0% 14,5% 14,7% 38,0% 15,3 13,3 2005 2006 2007 E 25 25,3 2008 2009 C/D 2010 2011 2012 2013 2014 A/B ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Foreign sector 26 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Foreign sector Trade balance Currently imports has been rising above the exports, generating an erosion in the trade surplus in recent years. It is clear to point out that this trend could create a deficit, especially with the increase in the value of imports, the appreciation of the dollar against the real, but mostly the increase in commodity prices during 2014, which affected the main Brazilian trade partner: China. However, in recent months, the price of minerals and agricultural products has fallen sharply, resulting into a turnover into Brazilian trade balance, which closed the year with a deficit of US $ -4 billion, lower than the expected by the market. Brazilian trade balance US$ Billions Exportação Exports Importação Imports 256 226 153 161 161 138 119 97 58 56 60 47 73 2001 2003 2002 63 74 2004 2005 48 121 243 223 242 240 225 229 128 153 173 121 91 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Research - Deloitte (based on MDIC data). 27 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Main exported products - 2014 Main imported products - 2014 Foreign sector 18% Trade balance 14% Mining Soy Brazilian export list 2014 8% 10% Transports material Oil Commodities – 63% Capital and Consumption goods – 28% 19% Fuel and lubricants 14% Mechanic equipment 12% 8% Electronics Vehicles 7% 5% Beef Chemicals Commodity price index Index base (Dec/2006=100) Fuel – 7% Others – 2% 205 180 155 130 105 80 Dec/2014 55 Dez 2007 Dez 2008 Dez 2009 Dez 2010 Dez 2011 Dez 2012 Dez 2013 Dez 2014 Dez Preço das Commodities Commodities price 28 Source: Research - Deloitte (a based on MDIC, Central Bank and IMF data). Volume das Exportações Exports volume ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Foreign sector Partners with: Trade balance Exports Imports Major trading partners of Brazil and its products Both Gold Iron ore Soy Soy Iron ore Oil Iron Coffee Diesel Thrusters Propane Vehicles Chemicals Pesticides Fungicides Electronics Autoparts Iron ore Poultry Pulp Coffee Machinery Equipment Iron ore Soy Electronics Mobile Beef Sugar cane Oil Diesel Oil Beef Cars Cars 29 Source: Research - Deloitte (based on Central Bank, IMF and EIU). ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Brasil – Argentina US$ Billions Foreign sector 14 The decline in manufactured goods exports to Argentina influenced directly in the trade balance since the beginning of the year, this is among the main reasons for the fall in the income results e between the two countries at the end of the year. It also resulted into a deficit result of the Brazilian trade balance account, with the Chinese economic slowdown (and thus the drop in trade with the country), Argentina was expected to be the major Brazilian partner this year. Brasil – USA US$ Billions 27 27 26 20 19 13 36 34 25 25 26 35 32 27 25 10 10 2007 2008 2009 2010 2011 2012 2013 2014 (+) (+) (+) (+) (+) (+) (+) (+) (+) (+) Results Exports Brasil – China US$ Billions Imports 46 44 31 41 41 33 34 37 37 26 2007 2008 2009 2010 2011 2012 2013 2014 (+) (+) (+) (+) (-) (-) (-) (-) (-) (-) Source: Research - Deloitte (based on MDIC data). 11 2006 20 Imports 14 14 2005 17 Exports 16 16 8 16 15 20 6 19 2006 30 12 13 13 17 18 14 27 2005 Results 19 18 Trade balance 23 23 11 21 16 13 7 5 8 8 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (+) (+) (-) (-) (+) (+) (+) (+) (+) (+) Results Exports Imports ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Income and services US$ Billions – Account balance Foreign sector Income and services In 2012, and for the first time since 2000 the balance of services recorded levels higher than income. Thus reflecting the output of related resources, basically to services more than revenues sent abroad, a situation that remained in the last two years. Services Serviços Income Rendas (47) (41) (34) (29) (27) (17) This results show a high level on international travel (outflow of US$ 18.7 billion) and in equipment rental service delivery (US$ 22.7 billion). (38) (41) (40) (40) (35) (31) (19) (13) (10) 2006 Largest accounts of net services US$ Billions (40) (49) (47) 2007 2008 2009 2010 2011 2012 2013 2014 (5,0) (10,0) International travel Viagens internacionais International travel IT services e informação Computação and licenses Royalties e licenças Equipment rental Aluguel de equipamentos Insurances Seguros (15,0) (20,0) (25,0) 31 2006 2007 Source: Research - Deloitte (based on Central Bank). 2008 -18,7 -22,7 2009 2010 2011 2012 2013 2014 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Foreign sector Balance of payments The current account recorded in 2014 a US$ 90 billion deficit in total. This negative result, however, was offset by the increase of financial transactions within the Brazilian accounts (primarily in fixed income securities), which added to the significant increase in the sale of services and income abroad, thus overlapping the bad result of the trade balance (deficit) and managing the balance of payments to close the year with a positive result (US$ 10.8 billion), as opposed to 2013 (when it had a US$ -5.9 billion deficit). Balance of Payments US$ Billions Trade balance Net services and incomes Unilateral transfers Current account Capital and financial account Errors and omissions Balance results 2009 2010 2011 2012 2013 2014 25,3 -52,9 3,3 20,3 -70,6 2,8 29,7 -85,2 2,9 19,4 -76,5 2,8 2,4 -86,8 3,4 -0,3 -88,3 1,9 -24,3 71,3 -0,3 46,7 -47,5 100,1 -3,5 49,1 -52,6 111,9 -0,6 58,6 -54,2 72,7 0,3 18,9 -81,1 74,2 0,9 -5,9 -90,3 97,7 -1,3 10,8 Note 1. Errors and omissions: The exit of credit and debit released in the balance of payments comes from various sources of information, generating in practice, a net-zero. The main reason lies in the discrepancies of different temporal data sources used. Thus, it becomes necessary to launch of a balancing data of accounts. Errors and omissions lend themselves therefore to compensate for any overestimation or underestimation of registered components. 32 Source: Research - Deloitte (based on Central Bank data). ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. FDI Inflow Share by country - 2014 Foreign sector 19% Foreign direct investment (FDI) FDI showed a slight decrease in 2014 compared with the previous year, leading to Brazil's fall in the ranking of largest global FDI inflow (from the 5th position to the 7th). Nevertheless, the Central Bank and the EIU expect that the FDI inside the country remains representing 2.9% of GDP from 2013 to 2017. Meaning that the inflow of foreign capital should remain at about US$ 60 billion in the coming years Foreign Direct Investment (FDI) US$ Billions 67 65 64 26 22 18 17 15 19 10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 33 Source: Research - Deloitte (based on Central Bank data). 16% 5% 6% 8% 62 35 33 2% 3% 3% 9% 9% Share by segment - 2014 48 45 Netherlands USA Luxembourg Spain Japan Portugal France Switzerland United Kingdom Germany Others 20% Trade Telecommunications Financial activities Vehicles and autoparts Chemicals Metallurgy Chemicals Oil and gas extraction Mining Insurances Real estate Food IT Equipments Others 10% 9% 35% 8% 5% 3% 4% 3% 4% 3% 4% 4% 4% 4% ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. BDI Outflow Share by country - 2014 Foreign sector Brazilian Direct Investment (BDI) The Brazilian Direct Investment abroad showed a growth resumption during 2014. This result is also a reflection of the performance of national companies’ investments through the year. Notwithstanding, the high % share of the country outflow continues to be inside Fiscal Paradises (mainly represented by: Cayman Islands, Bahamas, British Virgin Islands, Panama, Bermuda and Monaco). Brazilian Direct Investment (BDI) Capital outflow - US$ Billions 1% Fiscal Paradises Portugal USA Austria Luxembourg Switzerland Spain Chile Argentina Uruguay Others 8% 44% 9% 12% 18% Share by segment - 2014 Inverted signal (Debt) 30,2 24,4 24,1 23,5 18,2 18,0 13,7 12,1 8,5 7,8 2,5 2,8 3,9 2001 2002 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 34 4% Source: Research - Deloitte (based on Central Bank data). Financial Activities Non-financial holding companies Telecom Mining support activities Metallurgy Mining Trade Oil products Food Vehicles Other 1% 3% 8% 34% 6% 8% 18% 19% ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Money market 35 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Credit loans Credit / GDP (%) Money market Credit loans 59,0 53,9 56,0 2012 2013 49,1 In 2013 and 2014, credit operations grew more moderately compared with the expansion at the beginning of former president Lula’s government in 2003, mainly driven by loans taken by individuals. The total credit loans in Brazil during 2014 reached R$ 3.0 trillion, leading to an increase in the GDP ratio to 59% of the entire value of the Brazilian nominal revenue during the year. 29,4 2006 41,3 41,8 41,2 2008 2009 2010 32,7 2007 2011 Credit Operations in Brazil R$ Billions 733 2006 36 936 2007 1.227 2008 Source: Research - Deloitte (based on Central Bank data) Note 1. Credit operations from public and private sector. 1.414 2009 1.706 2010 2.034 2011 2.368 2012 2.715 2013 2014 3.022 2014 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Money market Credit loans Default % end of the month 6,0 The corporate default rate increased 0.2 percentage points compared with the end of last year, reaching 2.0% in December 2014, a marginal index if considered the big directed credit values. The individual default rate, however, continues to fall, reaching 4.2% at the end of the year. 5,0 4,0 3,0 2,0 1,0 0,0 Corporate Average interest rate for Corporations and Individuals % variation at the end of the month Individual Pessoa Física Individual 50 45 40 35 30 25 20 15 10 5 Pessoa Jurídica Corporate 2009 37 2010 Source: Research - Deloitte (based on Central Bank data) Note 1. Credit operations from public and private sector. 2011 2012 2013 2014 Dez/14 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Money market Credit loans by type % Composition Credit loans 19% The loan approvals had an increase growth in recent years, mainly promoted to combat the recent economic situation coupled with the great immersion of a new demographic population in the middle class, a larger access to credit was given for the purchase of vehicles and households, especially for individuals. Companies continue with the main credit facility, the BNDES, continues to contribute with the highest gross value of all Brazilian installment system. 45% 16% 7% 1% 5% Financiamento BNDES BNDES Imobiliário Real estate Veículos Vehicles Rural Credit cards Cartão de crédito Products acquisitions Aquisição de bens Outros Others 7% Credit concession by type US$ Billions 19 17 Vehicles Real estate 15 13 11 9 7 5 38 Source: Research - Deloitte (based on Central Bank data) Note 1. Credit operations from public and private sector. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Capital market 39 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Global stock market Index: 01/02/2010 = 100 Capital market 170 Stock exchange 150 The decline of Ibovespa index can be observed both in its variations within the country since 2012: (i) Where most recently the case of the oil and mining listed companies, which held much of the Ibovespa market value, had a fall over his index to about 52,000 points. 130 110 90 70 (ii) We can also examine the effect taken into account a index 100 basis in 2010, and see that the European stock markets and North America, even after crisis surpassed the average value of Brazilian growth. 29/10/2010 Ibovespa 04/08/2011 29/05/12 Dow Jones 01/04/13 Fontes: 70 Announcement of the end of US’ QE 65 03/12/2013 Euronext 100 31/12/2014 31/12/2014 19/08/2014 31/12/2014 31/12/2014 Shanghai * medido pelo EMBI+ do JP Fonte: Banco Ibovespa index Thousand points Thousands 50 04/01/2010 Fall of the US$ value with the increase of the Pessimism in country interest rate. reported data from Polls in Brazilian both the Brazilian election predict a and the US economy second Round. by BC and FED. December/2014 “Seesaw Effect” Low prices and average volatility on listed companies create a huge wave of speculation and buy / sell orders inside the market 60 55 50 Falling prices of oil, gas and mining listed companies Huge decline on oil companies price value. 45 40 02/01/2012 11/05/2012 06/09/2012 17/01/2013 21/05/2013 Fontes: Banco Central - Research (based on BM&FBovespa, IPEA data and Shanghai Exchange Market data) . 40 Source: Deloitte Fonte: Banco Central e EMBI 17/09/2013 17/01/2014 20/05/2014 16/09/2014 31/12/2014 * medido©2015 peloDeloitte EMBI+ doTohmatsu. JP Morgan Touche Todos os direitos reservados. Type of registered offers 5% 1% Capital market 2007 Stock exchange 3% The number of IPOs in Brazil has fallen considerably since the start of the unstable economic scenario that started two years ago. 12% However, Brazil has a very interesting scenario for a restore on the emissions. According to Edemir Pinto, BM&FBovespa president in an interview for the Financial Times, Brazil has about 60 IPOs ready to be launched in 4% 7% Stocks Audiovisual certificate Debentures FIDC Real estate bonds 140 120 100 80 60 40 52 15 8 26 11 21 2007 2008 2009 5 19 20 0 IPOs Subsequent Offers 41 Market value 140 64 12 4 9 7 11 1 8 2010 2011 2012 10 15 11 14 3 10 Source: Deloitte - Research (based on BM&FBovespa, CVM and Thomson data). 17 3 2013 15 9 1 15 2014 2 1 1,8 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 Millions Public offering and BM&FBovespa market value evolution R$ Billions 12 27% 8% the market is the political and economic situation remain stable throughout the year. 160 19% 14% 15% 2014 BDR CRI Promissory notes FIP Other shares and bonds 3%1% 4% 10% 47% 7% 13% Stocks CRI FIP Subscription bonus Debentures Real estate bonds Audiovisual certificate FIDC ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Brazilian portfolio evolution US$ Billions Capital market Stock exchange Fixed Rendaincome Fixa 32 Much of the decline of investments of IPOs emissions and the Brazilian stock market in general is due the recently lack of in the entire political and economic scenario inside the country. This can be shown by the increase in fixed income investments (less volatile than the stock market), as well as the significant results of the National Treasury and Government bonds through 2014. Açõesmarket Stock 25 24 20 15 12 10 6 5 11 6 0 Best type of investments in 2014 Index (01/02/14) = 100 2009 2010 2011 2012 2013 2014 120 110 100 90 80 1/2/2014 2/2/2014 3/2/2014 4/2/2014 5/2/2014 Fixed income (CDI bonds) Gold (daily price) 42 Source: Deloitte - Research (based on BM&FBovespa and Economatica data). 6/2/2014 7/2/2014 8/2/2014 US$ (daily price) Savings account (daily yield) 9/2/2014 10/2/2014 11/2/2014 12/2/2014 Stock market (Ibovespa index) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Capital market Merger & Acquisition The fall in the number of M&A in 2014 (893) compared to 2013 (938) shows the current economic slowdown of the Brazilian economy. This decrease should be maintained through the entire year of 2015, as business confidence will focus on identifying speculation around the new government's direction and how this will impact over the investors and company owners’ business. Merger and Acquisitions Number of operations 872 938 893 588 329 2010 43 2011 2012 2013 Source: Deloitte - Research (based on press, TTR and Thomson data). Includes Mergers, Acquisitions, Partnerships, Joint Ventures, OPA, Minority, PE and VC. 2014 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Public sector 44 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Public sector net debt Central government, state and city governments, state owned companies - % GDP Main reasons that justify increased debt over GDP during this period: Public sector Net debt and primary surplus The Government is moving into the direction of an adoption for primary surplus in the entire balance (balance sheet results before payment of debts and interest), this view appears to be in line with the new competitiveness focus of the country, adopting crucial measures to remove infrastructure bottlenecks. However, the primary balance reached a deficit in their accounts at the end of 2014, something that had not happened since November 1998. - 51 8 48 3 42 45 2004 2005 Renegotiation of state government’s debts Debts recognitions Interest rate increase 45 39 42 39 37 35 34 37 48 53 49 51 49 49 49 49 52 -1 -7 -11 -9 -10 -13 -14 -15 -15 2006 2007 2008 2009 2010 2011 2012 2013 2014 47 foreign net debt Dívida externa líquida Dívida interna líquida National net debt Public sector nominal and primary surplus Central government, state and city governments, state owned companies - % GDP (12 months accumulated) 3,8 -3,4 4,1 -2,2 4,1 2,1 2,8 -3,3 -2,5 -1,5 3,1 -2,6 Primary Primário Nominal 2,4 1,9 -2,5 -0,6 -3,3 -6,7 2006 45 2007 2008 Source: Deloitte - Research (based on Central Bank data). 2009 2010 2011 2012 2013 2014 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Public sector 21% 24% Tax and fees The Brazilian federal revenue has grown substantially in the last 15 years cycle (an increase of 419% from 2010 to 2014). Taxes levied on goods (ICMS) and the incidence of income tax on both individuals and corporations (IR) were the plots that grew the most in overall taxation value. The two are also the two main government revenues, with almost 40% of the total. ICMS IR INSS COFINS FGTS IPI IOF Others 2% 2% 17% 6% 11% 17% Brazil’s annual tax revenue R$ Billions 939 1.101 1.147 2013 2014 992 800 676 690 2008 2009 600 515 2006 46 2007 Source: Deloitte - Research (based on Federal reserve data). 2010 2011 2012 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Difference between the incidence of taxes and benefits in each country Public sector But regarding the use of the tax for the benefit of the country, Brazil still has a very large gap if compared with other countries, being one of the highest rates of GDP (~35%) and lower use in public services benefits. % GDP in taxes Tax and fees IRBES index (1) – Return to the society welfare 50 45 40 35 30 25 20 15 10 5 0 IRBES GAP (Appearing only in the 30th position of the IRBES index, calculated by the OECD) Total annual tax on GDP % GDP 40% FHC 1 FHC 2 Lula 1 Lula 2 Dilma 35% 30% 25% 20% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 47 Source: Deloitte - Research (based on Federal Reserve, OECD and UN). Note 1: The IRBES are the results from the sum of the tax burden, weighted percentage for the importance of this parameter, with the HDI, equally weighted. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. 0 20 40 60 80 100 120 140 160 180 Investments 48 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. PAC Investments Disbursements made by PAC I and PAC II – 2007-2014 R$ Billions Investment plans 68,0 Brazilian Infrastructure evolution % GDP 53,7 39,3 5,4 0,5 7,3 Água Saneamento Watereand sanitation Transportes Transports 3,6 2,0 0,2 1,5 0,8 2007 Telecomunicações Telecom Eletricidade Electricity 2,7 0,2 2,6 0,2 2,3 2,3 2,3 2,2 2,1 0,2 0,2 0,2 0,6 0,6 0,6 0,6 0,6 1,1 0,6 0,5 0,6 0,6 0,6 0,8 0,7 0,9 1,0 0,9 0,8 0,7 1990 2000 2010 2011 2012 0,6 0,4 1,1 2,1 0,2 1,5 1970 1980 2008 17,9 2009 2010 28,0 2011 2012 2013 *2014 Companies 0,2 0,6 11,3 22,1 2013 *2014 Company Petrobras Eletrobras Furnas Vale Trump Organization / EVEN / Salamanca / MRPI Louis Dreyfus Commodities (LDC) Vanguarda Agro (Gávea Investimentos - JP Morgan) Grupo Ultrapar Bridgestone / Firestone Sumitomo ECO Bresco Prebuild Biourja Trending Value (R$ Billions) 236,7 52,4 40,0 35,7 0,81 0,77 0,26 0,19 0,16 0,16 0,15 0,14 0,11 0,11 Source: Renai and companies websites. 49 Source: Research - Deloitte (based on National Treasure, press, IPEA/World Bank/ BNDES - *Pezco Microanalysis and National Treasure expectations). ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Agriculture 50 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Agribusiness: Exports 2014, % Composition Agriculture Soy complex continue as the main export product of the Brazilian Agribusiness, with 37% of the total in 2014, followed by beef (20%); sugar and alcohol with 12%, which has been decreasing its share since 2011 (from 19% to 12%). Agricultural production has also increased substantially over the last 10 years, especially sugar cane, which accounts for about 70% of the production of the last four season crops, with expected production of 650 thousand grains for 2015. 452 258 292 331 319 37% 8% 8% 12% 476 Position and share of Brazilian grain production globally 385 1st 2nd 1st 2nd 3rd 2006 2007 2008 2009 Agricultura Agriculture 51 331 372 464 Soy Complex Meat Sugar Paper and Pulp Coffee Leather Tobacco Lumber Orange Others 2% 4% 20% Gross production value of agriculture and livestock US$ Billions 500 450 400 350 300 250 200 150 100 50 0 3% 3% 3% 2010 2011 Pecuária Livestock Source: Research - Deloitte (based on MDIC, USDA and Conab data). 2012 2013 2014 2015 3rd 4th 5th 21 35 30 17 15 8 3 7 Sugar Coffee Soy Beef Poultry Maize Pork Cotton Agropecuária Agribusiness ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Industry 52 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Industry The low growth of global economic activity especially for the Brazilian market has put the Brazilian industry "steps back" inside the international competition. In this sense, even with the growth of the Brazilian domestic consumption, domestic production had its physical production almost stagnant. These results reflected directly with the difficulty with the international results in terms of competitiveness. Mainly with automotive, metallurgy and chemical industries. Industrial production evolution Index Sep/2008 = 100 105 -5.2% 100 95 90 Industry Confidence Index 85 120 115 110 105 100 95 90 85 80 75 70 80 53 Financial crisis 75 70 Source: Research - Deloitte (based on IBGE and FGV data). Seasonally adjusted production and sales. Dec/2014 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. 2% 3% Metallurgy Industry 4% 4% % Global share in steel production 5% Chemicals 2004 Chemical trade balance US$ Billions 7% Exportações Exports Importações Imports 28% EUA USA 40 Rússia Russia CoreiaKorea do Sul South Alemanha Germany Brasil Brazil Ucrânia Ukraine Others Outros 30 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Maintenance of increased imports 11% 6% 3,1 3,1 3,4 3,4 3,4 3,7 3,1 2008 2009 2010 2011 2012 2013 2014 Decrease in the production and storage of vehicles through the end of the IPI. 54 5% 7% Source: Research - Deloitte (based on MDIC, Anfavea, World Steel and Ibá data) 2006 9,0 2007 9,4 2008 Paper 13,3 12,7 12,0 10,7 2007 10% 5% Paper and pulp production Million ton 8,7 2006 3% 4% Paper and pulp Brazilian automotive production Millions of units 2,4 4% 3% 4% 5% 2% 2% 3% 4% Brazil maintains its same global share even with the fall of 3m tons. Automotive 2,8 49% Japan Japão India 10 18% China China 26% 50 20 2014 5% 9,4 2009 14,2 10,0 2010 13,9 10,2 2011 14,0 10,3 2012 Pulp 15,1 10,4 2013 Increased production and exports – valued stock market for the sector companies 15,0 9,5 2014 Nov/14 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Oil and gas Industry Mining National production of oil Million barrels Iron ore exports US$ Billions - FOB 823 41,8 30,9 28,9 8,9 2006 10,6 2007 16,5 32,5 712 25,8 13,2 2008 2009 2010 2011 2012 2013 2014 Drop in exports of iron ore due to Chinese economic situation. 638 2006 2007 768 754 738 2010 2011 2012 2013 663 2008 2009 2014 Despite the growing production, Brazil suffers from low oil prices and management problems with its main producer. Civil construction Energy Household deficit Households without occupation – in Millions 6,3 6,3 6,0 5,5 6,0 6,9 7,5 2005 2006 2007 2008 2009 2010 2011 Installed capacity - gW 8,1 8,9 2012 2013 9,9 11,7 96 2014 Increased housing deficit, real estate prices still high. 55 629 750 Source: Research - Deloitte (based on MDIC, ANP, Aneel and Fundação João Pinheiro data) 2015 100 103 107 137 113 117 121 127 2006 2007 2008 2009 2010 2011 2012 2013 2014 (*) Implementation of new technologies, such as wind power; but there will be an increase into energy prices and possible blackouts. (*) Expectation ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Services 56 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Services Retail revenue evolution R$ Billions The retail sales have shown a tendency to growth in recent years. Among the reasons that boosted the industry are mainly increased income of credit, even after the complicated scenario in recent years. 255 255 2008 2009 329 328 2010 2011 356 348 353 2012 2013 2014 214 Other important reasons was the increase in the number of formal jobs. Retail sales evolution Index Sep/2008 = 100 174 2006 2007 150 140 Brasil Brazil EUA USA 130 120 110 100 90 80 Dec/2014 70 Dez 57 2004 Dez 2005 Dez 2006 Dez 2007 Dez 2008 Dez 2009 Source: Research - Deloitte (based on IBGE, US Census Bureau and Euromonitor data). Seasonally adjusted. Dez 2010 Dez 2011 Dez 2012 Dez 2013 Dez 2014 Dez ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. THL Services Agriculture Industry Services Services, agriculture and industry GDP % variation yoy. R$ 25,6 bn 2014 WC Investments 12,0 +691 thousand tourists 8,0 Tourism legacy 4,0 0,0 R$ 36,7 bn Rio 2016 Investments -4,0 -8,0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Healthcare One of the highlights of 2014 was the increased tourism in Brazil due the World Cup, which generated a R$797 million revenue just in June/July. Technology, Media and Telecom Brazilian healthcare revenue R$ Billions 27 32 37 2006 2007 2008 40 2009 Municipalities covered by 3G in Brazil 46 2010 54 2011 63 2012 70 2013 80 2.625 2014 448 711 2008 2009 3.293 3.554 3.827 2012 2013 2014 1.287 2010 2011 Increased growth due a fierce investment inside the sector, especially with generic ~70% of Brazilian municipalities already have 3G technology, which continues drugs and health plans. with a moderate expansion, nevertheless some already are adopting 4G technology. 58 Source: Research - Deloitte (based on Euromonitor, MTUR, Teleco, Abia and Portal da Copa data) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Global scenario 59 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. USA 60 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Industrial production x Capacity utilization USA Production (% variation end of the year) Much of the analysis of the US economy must be focused in the results of 2014, when the country got its most satisfactory scenario since the financial crisis; particularly given the heated industrial production, which was intensified by all sectors. 10 This resulted in a substantial drop in unemployment, led by increased employment, higher capacity utilization and a large increase in domestic demand. -5 5 85 80 81 2,2 2,5 5,7 78 0 6,6% 2,9 76 77 78 4,2 79 80 75 70 65 -11,3 2007 USA – Employment indicators Monthly variation 6,7% 3,8 -10 2006 6,7% 3,3 74 69 -3,4 -15 7% Capacity utilization (%) 2008 2009 60 2010 2011 2012 2013 2014 Creation of new jobs (variation in 1000) 500 Unemployment rate 6,6% 6,2% 400 6,3% 6,1% 6,2% 6,1% 300 5,9% 6% 5,7% 5,8% 5,6% 200 100 5% 61 84 144 222 203 304 229 267 243 203 271 261 353 252 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Source: Research - Deloitte (based on Bacen/Bloomberg and Federal Reserve). 0 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. USA Nominal GDP US$ Trillions The result of the US GDP in the third quarter of 2014 gives evidence that the country continues its recovery trend. Considering the last five quarters, the average rate of the US economy growth reached 2.8%. Estimates for 2015 show that the recovery of the US economy will have an impact over the World economy, the growth of the United States has to compensate for the slowdown in China that goes through a process of deceleration. 20,7 13,9 14,5 14,7 14,4 15,0 15,5 16,2 16,8 17,4 18,2 18,9 19,7 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Price index % variation (end of the year) Real GDP % variation yoy. 4,1 2,7 2,8 3,0 1,8 1,8 1,5 2,5 1,4 2,3 2,4 2,2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Research - Deloitte (based on EIU data). 2,5 1,8 1,6 2,3 2,2 2,4 2,5 2,4 2,6 -0,3 0,7 0,0 62 3,4 -2,8 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. USA With the end of the US economy adjustment plan (QE Quantitative Easing) announced in October 2014, it is expected a short-term recovery of the country economy through 2015, indicating that the country might start to reduce its interest rates. USA – GDP, Money market interest rates and Federal bonds interest rates % variation yoy. (PIB) GDP Produto Interno Bruto Taxa de bonds Juros dos Titulos Federal interest rateFederais Taxa demarket Juros básicas dos Estados Unidos Money interest rate This also helps the global economy during the weakness of the countries in Europe, China and Japan, leading to expanding global demand for dollars causing the devaluation of national currencies. 6 5 5,3 4,3 4 Conduct of the national currencies against the US$ dollar US Dollar / National currency - Index 01/01/14=100 2 130 Real-Br Yen-Jap Peso-Mex Euro-Eu Yuan-Ch Rand-Afr 4,3 3 1 4,6 4,3 3,7 4,8 4,3 3,3 2,3 3,2 2,8 2,4 2,5 1,8 0,25 0,25 0 115 -1 100 -2 -3 85 -4 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 63 Source: Deloitte Research - (based on Federal Reserve and Exchange rates data) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Europe 64 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Europe Euro Zone (19 countries) European Union United Kingdom Czech Republic Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain. Hungary Denmark Sweden Bulgaria Romania Croatia 65 European Union (28 countries) Poland ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Europe Nominal GDP US$ Trillions After threatening a risk of default in the public accounts throughout the entire year of 2012. Greece, Portugal, Ireland and the other PIIGS (Italy and Spain), showed a slight recovery in their internal results, mainly by economic plans led by the "troika“, the European Commission, European Central Bank and International Monetary Fund. This culminated in important and very considerable recovery results of the PIIGS in 2014, which influenced directly on various issues related to the “Orthodox Economic-Tripod”: public accounts, exchange rate’s appreciation and nominal GDP growth with inflation and interest adjustments. 0,84 0,80 0,75 0,77 0,76 0,85 0,83 5 5 17 12 12 4 4 18 17 18 20 20 21 18 19 14 15 15 6 6 6 13 12 13 13 13 5 5 5 5 5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 3,0 2,0 0,82 0,73 0,4 1,6 0,8 1,3 1,7 1,7 1,6 -0,7 -0,4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 0,69 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 66 4 3,3 0,72 0,68 11 12 14 17 Euro Zone Real GDP – Euro Zone % Variation yoy. Exchange rate – Euro/US$ End of the year 0,76 15 17 19 European Union Source: Research - Deloitte (based on EIU and IMF data) -4,5 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Price index – Euro Zone % variation y.y. Europe The interest rate and inflation reduction, as shown in the previous slide helped a strong recovery in the Euro Zone, which had repercussions on the entire European Union. In European interest rate chart, we can see the trend of upraise in the interest rated led by the European Central Bank for the next four years, mainly by the beginning of the economic recovery in the region. 3,1 2,8 2,2 2,2 1,6 0,9 1,9 Interest rates – European Central Bank % variation yoy. 2006 2007 2008 2009 0,8 2010 2011 2012 2013 1,0 1,6 1,3 1,3 2016 2017 0,5 2014 2015 2018 Interest rates into selected countries / regions % variation yoy. 4,3 150% 4,6 100% Scenario 1: Financial Crisis Fall in the global interest rates Scenario 2: Economic disparity Large gap in the variation of interest rates between consolidate and emerging markets. 3,1 Scenario 4: European Crisis Second global interest rates fall. Scenario 5: US and Europe recovery Chinese slowdown and weak economic situation in Brazil. 50% 1,9 1,2 0,8 1,4 1,1 0,6 0,2 0,2 0,1 0,4 0% -50% Scenario 3: Recovery of Emerging markets -100% 2009 2010 Brasil Brazil 67 Source: Research - Deloitte (based on EIU and IMF data) 2011 China 2012 EUA USA 2013 2014 Europe Europa ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Net debt / GDP % Participation Europe 175 171 Looking at the net debt results, we can still see that there is room for improvement within the PIIGS (Portugal, Ireland, Italy, Greece and Spain), something that could be pursued with increasing domestic and industrial credit and incentive tourism in the region (as happened in 2014), this has already reduced the unemployment rates in these countries. 125 129 128 134 2013 120 112 2014 92 98 92 96 100% GDP 74 77 75 40 Portugal Italy Ireland Greece Spain Germany France UK % variation of domestic credit of selected countries Unemployment % variation (end of the year) Portugal 5 0 UK Italy Italy Ireland Greece Spain Germany France UK 30 -5 25 -10 -15 France Portugal Ireland -20 20 15 10 Germany Greece 2012 68 Spain 2013 5 0 2014 Source: Research - Deloitte (based on EIU and IMF data) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Latin America 69 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Latin American countries share on region’s GDP % Participation Latin America 12% The deceleration of Latin American Real GDP (2.4% to 1.0%) has a more cyclical nature than structural. But it was also affected by the recent slowdown in emerging countries. However, the region is resistant to possible recession in developed countries (double-dip recession), thanks to strong economic fundamentals and a more concise domestic demand, through access to credit and the expansion of the workforce. But inflation, however, begins to expand dramatically in Venezuela, Brazil, Mexico and Argentina. Consumer prices % variation (end of the year) 4% Brazil Mexico Argentina Colombia Venezuela Chile Others 38% 9% 6% 9% 22% Nominal GDP US$ Trillions 10,4 9,3 8,6 8,1 7,3 6,5 6,5 6,8 7,8 7,2 3,6 4,2 4,7 5,3 6,0 5,8 5,9 5,8 6,1 6,4 6,7 7,1 4,1 5,6 5,1 4,6 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 70 Source: Research - Deloitte (based on EIU, IMF and Cepal data). 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Unemployment rate % Population Latin America Brazil is expected to lose share inside Latin America’s market. According to The Economist, the forecast for 2018 is that the country's participation in the region economy falls from 48% to 38%, mainly due to Mexican and Colombian rise in the period. Even with the reduction in the volume of the Nominal GDP participation in the continent, Brazil will continue to have a strong status regarding the inflow foreign capital and market significance inside the region. 16 14 12 10 8 6 4 2 0 Real GDP % Variation (end of the year) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Argentina Mexico Brazil Peru Chile Uruguay Colombia Venezuela 16 14 12 10 8 6 4 2 0 2012 2013 Argentina 71 Source: Research - Deloitte (based on EIU data). 2014 Brazil Chile 2015 Colombia Mexico 2016 Peru Uruguay 2017 2018 Venezuela ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. China 72 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. China The Chinese economic scenario has shown a decrease in their real GDP growth in the last three quarters. Even so, the growth base is still around 7%, closing the last year at 7.3%. This result has led China to take economic and fiscal stimulus measures to "re-leverage" its economy, and has decreased the level of investment in construction and infrastructure, which has not generated the expectation of employment, production nor the strong recovery foreign trade focused on the returned value generation expected at the beginning of the decade. Nominal GDP US$ Trillions 2,8 3,5 4,5 5,1 5,9 7,3 8,4 11,2 9,5 10,4 12,4 13,5 14,5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Consumer prices % Variation (end of the year) Real GDP % variation yoy. 6,5 14,2 4,6 1,9 2,8 12,7 4,1 2,5 1,2 2,5 2,4 3,2 3,5 3,4 1,4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 73 Source: Research - Deloitte (based on EIU data) 9,6 9,2 10,4 9,3 7,7 7,7 7,3 7,1 6,7 6,3 6,0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Investments / GDP % Participation China The high leverage of Chinese investments in GDP participation (at around 46% of the total) mainly caused by the falling interest rates uprising in 2009, and the strength to infrastructural growth inside the country has proven that this high number actually presents unsatisfactory results. 46 35 31 28 28 28 Since this policy was taken, large buildings have become abandoned, companies are loaded with over-stocked production and population concentration has created a high density in only a few cities, such as Beijing, Guangzhou and Shanghai. 25 25 24 22 22 19 18 17 16 Interest rates % Variation (end of the year) 5,3 4,3 3,4 2,7 5,0 5,0 4,6 5,2 5,5 4,2 4,4 2,7 1,7 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 74 Source: Research - Deloitte (based on EIU and Chinese press News data). Note 1: 7,093 square feets. New South China 659(1) thousand m2 abandoned The “Phantom Shopping” is a sample of negative results caused by high investment on GDP. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. 12 Chinese demographic pyramid - 2014 China Age Another critical situation that the country has presented is a demographic deficit of 5-19 years youngsters. The government began to worry about a possible decrease in the labor force for the next decade, which is already affecting productivity and could reduce the strong growth prompted by China. Male Female With this, the country is beginning to signing a possibility in an "opening“ situation for couples to have another child. Policy adopted in the early 90s inside the country to contain the Malthusian population explosion. China – Work force Millions of people Population Gap 796 791 799 799 800 799 798 792 796 794 787 783 781 778 Millions Unemployment rate and productivity % variation (end of the year) Unemplyment rate Productivity rate 7,0 15 6,5 13 11 6,0 9 774 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 75 Source: Research - Deloitte (based on EIU and CIA World Factbook data) 5,5 7 5,0 5 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. India 76 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. India The growth rate of India is above the world average, both in the evolution of real GDP (6.0% in 2014 and expected 6.6% in 2015), and in the evolution of its Nominal GDP, which is expected to triple in 10 years size, already appearing among the 10 largest economies in the world. The good results of the Indian economy contrast with most other BRIC economies, mainly because both India and Brazil are not linked by only a single commodity such as Russia (petroleum). 3,5 3,0 0,9 1,2 1,2 1,4 1,9 1,9 2,1 2,2 Real GDP % variation yoy. 11,8 10,4 9,4 8,0 7,6 9,3 8,3 10,2 9,8 8,3 7,6 7,3 6,7 6,3 6,2 6,1 6,9 4,0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 77 1,7 1,9 2,6 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Consumer prices % Variation (end of the year) 9,7 Nominal GDP US$ Trillions Fonte: Research - Deloitte (baseado em dados do EIU) 6,0 4,7 6,6 6,7 6,5 6,5 5,0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. GDP PPP (1) country ranking US$ Millions India (1) 2014 The Indian Growth demonstrates two important scenarios of its emerging economy. First, India stands out for its importance in the export of services. His expertise in IT, Information Technology and Telecommunications are essential to the use of outsourcing inside the US and Europe. China USA India Japan Germany Russia Brazil UK Indonesia France (If India appears as the 6th largest economy in service credit exports, and the US 1st, it owes much to the hand of Indian work, where 66% are expatriates in the country, and 7% of all CEOs of Silicon Valley are Indians). The second factor is the easy public access to the Indian food basket, much cheaper than in neighboring or correlated emerging countries. Exports of services - Credit US$ Billions (end of the year) 300 252 250 200 150 100 70 87 104 92 117 175 162 139 146 149 198 222 50 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Exports 78 India position in the service provide global ranking Source: Research - Deloitte (based on EIU data) 1 2 3 4 5 6 7 8 9 10 11 18.160 17.392 7.276 4.688 3.651 3.528 3.059 2.555 2.547 2.523 Big Mac Index(2) US$ 100 Bic Mac amount that can be bought in selected countries with the same value. 61 40 23 17 Source: Research – Deloitte (based on The Economist Big Mac Index). (1) GDP PPP = GDP purchasing power parity. (2) Big Mac Index = s an index calculated on the price of Big Mac in over 100 countries, with the aim of measuring the value of the living cost. Made by The Economist since 1986. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Russia 79 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Russia The Russian scenario presents a substantial decline in their accounts and GDP forecast than a few years ago, when they were seen as one of the most promising BRIC together with Brazil. Especially if taken into account that the country was the main supplier of oil and natural gas to Europe. With a GDP decline scenario for 2014 and 2015, an inflationary increase of almost 4% for the end of the year and a slow recovery after this period, Russia starts a backdrop of uncertainty as to where their economy is leading to; mainly caused by two key factors: (1) oil prices and (2) War with Ukraine. Nominal GDP US$ Trillions 1,9 1,7 1,3 1,0 2,0 2,1 1,9 1,5 1,4 1,2 1,6 1,8 1,9 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Consumer prices % Variation (end of the year) Real GDP % Variation yoy. 13,3 10,9 11,9 8,0 9,1 5,5 8,8 9,0 9,2 8,8 6,1 6,6 6,5 5,6 5,0 4,9 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 80 4,1 Source: Research - Deloitte (based on EIU data) -7,2 4,3 3,4 1,3 0,6 0,5 2,5 2,0 -3,5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Evolution of oil imports and shale gas production in the World (Index 2007 = 100). Russia The first factor quoted before is the large recent fall in oil prices, as Russia is an economy directly correlated with this commodity, the country has seen the value of the ruble plummet along with oil prices, as well as an increase in stock and reduction of international trade material, driven by a large global trade on shale gas led by the USA. The country still manages some stability with gas prices, but may suffer from the "Dutch disease" (1) in the next decade. Depreciation of the ruble linked to the oil price drop (1) Dutch-disease: is an economic term that refers to the relationship between the export of natural resources and the decline of the manufacturing sector, mainly caused by an extreme focus in an economy based on only one natural resource. 140 120 100 80 60 40 20 0 0,05 0,04 0,03 0,02 0,01 1000 800 Oil imports de petróleo Importação Shale gas de production Produção gás de xisto 600 400 200 0 2007 2008 2009 2010 2011 2012 2013 Oil market in Russia – Thousand barrels per day 10.500 8.500 6.500 4.500 2.500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Oil - US$ per barrel 81 RUB / US$ Source: Research - Deloitte (based on EIU, US EIA, IEA, Bank of Russia and Index Mundi data). Production Exports Stock ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Russia Key regions in the Russia-Ukraine War The second major factor was the recent war involving Russia and Ukraine due to the annexation of the Crimea by the Russians. Separatists Majority ethnic Russian regions in favor of separation The sanctions imposed by the US and EU, mainly on the country's major conglomerates have caused a reduction in the international market, policy and institutional relations, leading to a much larger drop in GDP than expected. Crimea Situation to be defined Nominal GDP US$ Trillions 2,0 2,0 2,0 2,1 2,2 2,1 1,9 2,1 2,3 2,3 2,5 2,5 2,7 3,0 1,8 1,6 1,4 2,8 Difference of US$ 1,2 bn 2012 2013 Russia (Current) 82 2014 2015 Russia (With Crimea and Spearatists annexed) 2016 2017 Russia (IMF forecast before the War) Source: Research - Deloitte (based on EIU, IMF data). Nominal GDP statistics before the war by the IMF (International Monetary Fund), 2012. Statistics of Russia with Crimean separatists conducted by Research - Deloitte with the Bank of Russia and the Central Bank of Ukraine data. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Southeast Asia 83 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Southeast Asian country share in the region’s GDP % Participation Southeast Asia 12% Southeast Asia, especially Indonesia, Singapore and Malaysia has risen as one of the major emerging economies in recent years. Indonesia 35% 14% The high number of foreign investment, the high degree of industrialization, and constant growth of their GDP has led economists to believe that this region may have an overall economic boost of the same proportion of the "Asian Tigers" (South Korea, Taiwan, Hong Kong and Singapore itself) had in the late 90s. Philippines Thailand Singapore Malaysia 12% Others 12% 15% Real GDP % Variation (end of the year) Region Nominal GDP US$ Trillions 20 15 10 5 1,9 0 1,1 -5 1,3 1,5 2,2 2,3 2,4 2,5 2,7 2,9 3,1 3,3 1,5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Indonesia Indonésia Myanmar (Burma) Tailândia Thailand 84 Laos Philippines Filipinas Brunei Source: Research - Deloitte (based on IMF and EIU data). Malaysia Malásia Singapura Singapore Camboja Cambodia 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Global % share of M&A in 2014 by country or region Southeast Asia The low cost of labor especially compared to China, where the average salary of a worker rose 14% in the last ten years has been a key point that transformed the countries of Southeast Asia in the newer emerging powers. With the prices in China becoming more expensive, global markets are pushing Chinese suppliers to build factories in other emerging countries of Asia. This has increased the confidence of venture capital funds and the growth in Private Equity to invest (either in M&A, financial investment, new business or IPOs) in Southeast Asian countries. Global confidence in investing in Southeast Asia and other regions. (Media 1 to 5, with 5 more confident). Southeast Asia 2014- 3n65 2013- 3,55 2012- 3,41 Southeast Asia – 3,65 Europe – 2,95 Latin America – 2,86 85 Source: Research - Deloitte (based on Deloitte’s PE and VC study and Thomson). USA UK France Russia Japan China Canada Germany Southeast Asia Brazil Others 28% 31% 7% 1% 3% 4% 7% 4% 5% 5% 5% Global % share of IPOs in 2014 by country or region 7% Southeast Asia - Pacific Europe 17% USA China Japan Rest of America Brazil 20% Others 2%0%4% 30% 20% ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Japan 86 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Japan Nominal GDP US$ Trillions The low growth in Japanese GDP is tied directly to the great debt that the Government has sustained in recent years, just over 2 times the country's GDP (alarming 230% at the end of 2014). 4,4 To control the debt, economists point it that is imperative to take a considerable increase in government revenue, led mainly by a significant increase in taxes, which has caused an inflationary increase and impatience of the population. 4,4 4,8 5,0 5,5 5,9 6,0 4,9 4,6 4,0 4,0 4,2 4,4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Consumer prices % Variation (end of the year) Real GDP % Variation yoy. 2,6 1,5 0,7 1,6 1,9 2,0 1,7 0,5 -0,4 -0,2 -0,1 0,3 -1,7 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 87 Source: Research - Deloitte (based on EIU data). 4,7 1,7 2,2 1,7 -0,4 -1,1 1,6 0,1 1,1 2,0 1,4 1,6 -5,5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Japan Japanese net debt % GDP This increase in government revenues should reach about 60% of GDP, almost double the collected today. Which could lead Japan in a situation with no apparent way out, with increasingly needs of government spending, especially with the pension and retirement of the Japanese population (which is getting older) but at the same time, the use of policies to control the tax increase has been criticized by population in the government of former Prime Minister Yoshihiko Noda. 167 162 171 100% GDP 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Elderly population and their dependency on government pensions Youth Adults Elders Japanese government revenue from fees and taxes % GDP % dependency of elders (right axis) 100% 50 80% 45 60% 40 40% 35 20% 30 0% 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 88 Source: Research - Deloitte (based on EIU and IMF). 189 193 230 233 238 240 241 210 216 224 60% GDP – necessary to pay the public net debt 31 31 32 30 30 31 31 32 33 34 35 35 35 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Other countries 89 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Other countries Crisis and conflicts General outlook Economic drivers France Canada Terrorist attack in Charlie Hebdo in Paris increased hostility against immigrants. Depreciation of the Canadian Dollar due to largely be correlated with the fall in oil prices Cuba Mexico Penetrating question with the murder of students and the recent fight against the narcotics Possible economic reopening with the US 90 North Korea Greece Election of Syriza questions the troika and participation in Euro. Guinea Ebola focus. Still being controlled Iran Egypt In recent negotiation of a nuclear program with the US, after the political opening during 2014 Venezuela With the oil crisis Maduro had to reduce the price of the transfer of gasoline for the first time in 17 years Recent cyber attacks accentuated the unstable political situation with the US. Economics and politics deteriorating after the uprising against Hosni Mubarak and Mursi, now the uprising is against Sissi, considered more authoritative than their predecessors. Nigeria Bolivia Evo Morales resumed the presidency. He searches access to the sea through a century dispute with Chile Syria Civil war and the rise of IS has caused major US and global interventional issues. Attack of the Boko Haram and possible civil war between North and South, initialized by jihadists, has South Africa deteriorated the Zuma, in his second term, has economy. focused primarily on investments in infrastructure. Australia Expectation of good economic growth, increased domestic economy, tax cuts and inflation. ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Commodities 91 Member Firms and DTTL: Insert appropriate copyright (Go Header & Footer to edit this text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Commodities Agriculture In early 2015 the main products sold by Brazil in the international market fell. Wheat declined -10.2%, due to increased global supply caused by reduced consumption. Cocoa rose by 1.3% compared to December 2014 and sugar showed a slight increase of 0.03%. The prices of soybeans and corn declined again, the average price of corn fell 2.18% compared to December and 8.6% if compared to January 2014. Falling soybean prices were 2.9% over December 2014 and over -21% if compared to January 2014. The coffee fell by 2.4% compared to December 2014 and had an increase of 43.8% compared to January 2014. On the global scenario, soy record production in 2014/15 crop in the United States must be followed by a significant harvest in Brazil. There are also fears about China's demand that canceled US purchases, in addition to decreasing margins for the production of soybean meal, which should affect the prices of commodities. 92 Source: Research - Deloitte based on World Bank, EIU and Index Mundi data). Agriculture commodity prices Index: Dec 2010=100 120 Sugar Soy Coffee Café Maize Wheat 115 110 105 100 95 90 85 80 Price of the main agriculture commodities Barley (US$/ton) Cocoa (US cents/lb) Arabic Coffee (US cents/lb) Robusta Coffee (US cents/lb) Cotton (US cents/lb) Maize (US$/ton) Palm oil (US$/ton) Rapeseed oil (US$/ton) Rice (US$/ton) Sorghun (US$/ton) Soy (US$/ton) Sugar (US cents/lb) Sunflower oil (US$/ton) Tea (US$/kg) Wheat (US$/ton) Wool (AUS cents/Kg) 2013 2014 2015 2016 2017 2018 246,6 110,6 139,5 94,2 90,4 264,4 856,9 1.079,3 489,5 243,3 556,5 17,7 1.124,0 2,9 321,5 1.063,0 167,8 138,9 200,2 100,4 83,1 205,9 821,3 907,3 423,8 207,2 501,3 17,0 901,9 2,7 302,7 1.084,3 150,0 128,7 186,3 98,5 70,8 182,5 714,1 775,7 401,3 185,0 403,8 16,8 864,9 2,8 261,3 1.097,3 175,0 133,8 202,5 112,5 69,2 191,3 660,1 749,2 391,3 200,0 413,8 18,2 897,8 2,9 272,5 1.108,2 200,0 130,0 200,0 120,0 70,0 200,0 680,0 775,0 400,0 215,0 430,0 19,8 950,0 2,9 310,0 1.119,3 220,0 125,0 185,0 130,0 72,5 215,0 720,0 800,0 415,0 220,0 485,0 20,2 1.000,0 2,9 312,0 1.130,5 ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Commodities Metal commodity prices Minerals According to the IMF commodity Monitoring Report (Jan/15), iron ore prices are expected to fall 5.3% in 2015 compared to 6.6% decline last year. 2013 15.962 13.925 2014 It is also expected a moderate fall in prices of precious metals, due to negative perception of institutional investors to make investments. The reduction in demand for commodities from China and India will also contribute to this decline. The main risk of metal prices remains through the occurrence of sharp slowdown in the Chinese economy, since the Asian country accounts for almost half of world metal consumption. 1.740 1.909 1.222 1.201 Aluminum Aluminio US$/ton Gold Ouro US$/troy oz 1.967 1.630 136 69 Iron de Minério Ferro ore Nickel Níquel Prata Silver US$/troy oz US$/lb US$/dry metric ton Metal commodity prices prices Metal commodity Index (Dec/2010 = 100) = 100) Index (Dec/2010 130 115 100 85 70 55 40 130 115 100 85 70 55 40 Dez Dez 2011 2011 Aluminum ore de Ferro Copper Minério deIron Ferro Alumínio Alumínio Cobre Minério Dez Dez 2012 2012 Dez Fonte: Research - Deloitte (a partir da consolidação de dados do Index Mundi e Economist Intelligence Unit - EIU) 93 Source: Research - Deloitte (based on Index Mundi and IMF). Dez 2013 2013 Dez Dez Níquel Cobre Nickel 2014 Gold Ouro Níquel 2014 Dez ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. Ou D Commodities Oil and gas In a scenario that assumes no further deterioration in the global macroeconomic environment and OPEC refraining from performing new management of oil supply, in 2015 the prices should keep an average of US$ 53/barrel - 45% lower than in 2014. The large current oil production capacity points out to an extension in this very gap in low prices for at least a mid-term period, with prices recovering modestly in 2016. It is estimated that the weakness in oil prices should be extended to other energy markets, particularly natural gas in Europe and Asia. The price of European natural gas and Japanese liquefied natural gas (LNG) are expected to fall 15% and 30% respectively in 2015. A moderate decline on prices are also expected for natural gas and coal in the United States. Monthly evolution on oil and gas prices September/2008 = 100 Oil and gas prices US$ Dollar Gás Natural Natural gas 6 140 Oil Petróleo 120 110 5 100 90 Oil Natural gas "Returning Point" Arab spring in Egypt 120 100 Critical decline on Oil and gas prices Financial crisis apex 80 4 70 60 3 60 Saudi Arabia lower even more the prices Crimea crisis. Russia blocks searching for the supply of gas competitiveness. 40 50 20 Dez 94 Source: Research - Deloitte (based on World Bank and Index Mundi data). “War with the shale-gas” European crisis and High oil prices 80 2009 Dez 2010 Dez 2011 Dez 2012 Dez 2013 Dez 2014 Dez ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados. A Deloitte refere-se a uma ou mais entidades da Deloitte Touche Tohmatsu Limited, uma sociedade privada, de responsabilidade limitada, estabelecida no Reino Unido ("DTTL”), sua rede de firmas-membro, e entidades a ela relacionadas. A DTTL e cada uma de suas firmas-membro constituem entidades legalmente separadas e independentes. A DTTL (também chamada Membernão Firms and serviços DTTL: Insert appropriate copyright (Go Header & Footer to editobter this uma descrição mais detalhada da DTTL e suas firmas-membro. “Deloitte Global”) presta a clientes. Consulte www.deloitte.com/about para 95 text) ©2015 Deloitte Touche Tohmatsu. Todos os direitos reservados.