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Posts Tagged ‘global downturn’

Volkswagen swells Brazil foreign investment legion

November 27th, 2009

The announcement of a $3.5 billion investment by Volkswagen on Thursday is the just the latest in a string of recent moves by foreign companies in Brazil.

VW intends to spend the money by 2014, when it will also sponsor the country’s national football team as it hosts the FIFA World Cup for the second time.

VW’s investment comes hot on the heels of Ford, which last week said it will plough $2.3 billion into an expansion programme until 2015.

Brazil’s car makers are expecting record sales this year after temporary cuts in taxes paid by producers were passed onto buyers

Michelin too is getting in on the act, investing ‘hundreds of millions of dollars’ in a new factory in Rio de Janeiro state, aimed at doubling its tyre making capacity in Brazil.

If that were not enough, October saw foreigners line up to invest $17.1 billion into Brazil’s financial markets - a record since the country’s Central Bank began calculating figures in 1947.

Whereas Brazil’s economy would have been devastated by such a global economic downturn downturn in the past, the relative lack of exposure of its banks to toxic US mortgage debts that fuelled the crisis have helped the country pull through largely unscathed.

Having been one of the last countries around the world into recession, Brazil was one of the first out, after economy returned to growth in the second quarter of this year.

While his precedessor Fernando Henrique Cardoso can quite rightly claim much of the credit for the groundwork laid for Brazil’s current stability, those who previously mocked Brazilian President InĂ¡cio Lula da Silva’s comments that the crisis would prove to be a small wave rather a tsunami, may be entitled to feel just a little foolish.

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