Brazil Political & Country Risk Rating

Grim growth outlook, mixed reform prospects

B3

MEDIUM RISK

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

The country risk assessments are your North Star metrics to make the right decision for your business and understand the risks in international trade. We have always the best solution for your needs

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GDP USD2055.506bn (World ranking 8, World Bank 2017)
Population 209.29mn (World ranking 5, World Bank 2017)
Form of state Federal Republic
Head of government Jair Bolsonaro (President, far-right) since January 2019
Next elections 2022, presidential and legislative
  • Important role on an international and regional scale
  • Diversified economy
  • Growing middle class
  • Robust foreign direct investment inflows, high level of foreign exchange reserves and low external debt
  • Support for IFIs likely if needed
  • Vulnerable to global commodity prices
  • High production costs
  • High taxation and red tape ("Brazil cost")
  • Large fiscal deficits and increasing public debt
  • Political and social tensions on the back of corruption and high income inequality

Trade structure by destination/origin

(% of total)

Exports Rank Imports
China 21%
1
18% China
United States 13%
2
17% United States
Argentina 7%
3
7% Germany
Germany 4%
4
6% Argentina
Japan 3%
5
3% France

Trade structure by product

(% of total)

Exports Rank Imports
Oil seeds and oleaginous fruits 11%
1
8% Petroleum, petroleum products and related materials
Metalliferous ores and metal scrap 10%
2
7% Electrical machinery, apparatus and appliances, n.e.s.
Meat and meat preparations 8%
3
7% Road vehicles
Petroleum, petroleum products and related materials 6%
4
6% Other industrial machinery and parts
Road vehicles 6%
5
6% Organic chemicals
The payment behavior of domestic companies is acceptable, though standard payment terms are very varied and DSO remains high.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

Given the length and cost of legal actions in Brazil, chances of obtaining enforceable judgments in a timely manner are low and it is preferable to consider amicable arrangements and specialist debt collection methods as a means to avoid domestic courts.

When it comes to insolvent debtors, use of the company rescue mechanisms is increasing; in practice, however, the chances of recovering debt remain extremely low.

Contact Euler Hermes

Economic Research Team

research@eulerhermes.com

Contact Georges Dib

Economist for Latin America, Spain and Portugal

georges.dib@eulerhermes.com

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