Economic outlook of Brazil today – and what are the prospects for the country? Which kind of influence the new government is expected to have on the economy?

The economic outlook of Brazil looks quite good for year 2019 and 2020 – the growth has returned after a deep recession in 2015 and 2016. Most observers are expecting 2,5 % growth and it can be even higher if the new government succeeds in its objectives for example to balance public accounts – and especially to reform costly, totally un-funded pension system. Whatever has been said about the new government of Brazil the economic agenda looks positive: Brazil is at last trying to open to foreign markets - lower tariffs, less subsidies, more commercial agreements. This is what Brazil needs to get its economic growth back to higher levels and to create more jobs. There have been many big investments waiting for the change of government. Now it has happened so many of these multibillion-euro plans could at last start. If it depends on business confidence – the last measured index is at its highest level since 10 years! – the promised investments and growth will happen.

Which kinds of business opportunities are there for Finnish companies in Brazil?

Of course, Brazilian market as a 7th or 8th biggest market has opportunities to all main sectors of the Finnish economy. At our promotion work we have found technology markets of connectivity incl. IOT, minerals, forestry, energy, health and education sectors as most promising. However, any company interested in expanding outside of Finland and looking for a potential market should certainly evaluate also the Brazilian market. Although far away it is far more accessible because of the European cultural heritage and communication in Portuguese is much easier than for example in Asian languages.

If a Finnish company decides to invest in Brazil, what are the most important issues this enterprise must take into its consideration to succeed in the market?

To succeed in the Brazilian market a Finnish company of course has to have competitive value proposal in terms of solution, technology and cost but very importantly good enough after sales service and maintenance by own subsidiary or credible local partners. When opening own subsidiary Finnish and other foreign companies must do proper tax planning within the rules to avoid paying more than competition and consider the high social cost of salaries. The new government is studying solutions to both complexity and high overall taxation of goods and labor costs, which are still burden equally to Brazilian and foreign investors.

How the Embassy of Finland in Brazil and the network of Honorary Councils can help Finnish companies in the Brazilian market?

The Embassy of Finland in Brasília, the Consulate in São Paulo and the honorary consuls around Brazil can help Finnish companies for example by providing contacts, providing information about market opportunities and political and economic environment, and helping to solve problems and providing advice. We work with close co-operation with our Team Finland Brazil partners (Business Finland and Finncham Brazil), in order to service the Finnish companies in their needs.

Please, tell us which kind of co-operation the EU countries have in Brazil to help companies?

EU countries have a lot of co-operation in Brazil in order to help companies. Perhaps the most important thing is market access issues, where EU countries share information between each other, and EU delegation has the lead in handling the cases with Brazilian officials. EU delegation also organizes market access meetings together with EU companies. Anytime Finnish companies have any kind of market access issues, they should contact the Finnish Embassy, so we could work together with our EU colleagues to help solve the issues. Also, it is good to remember that EU is currently negotiating a trade agreement with Mercosur. If an agreement could be reached, it would facilitate companies across the various sectors.

We know Brazil as a great holiday destination. Please, tell us more about the tourist attractions and holiday resorts in Brazil.

Brazil is certainly a place to visit! It is actually not only one country but also a federation of 27 countries (26 states and federal district) which all have their charm. You can start with urban jungle Sao Paulo – New York of the Latin America – to find just anything, and continue to the iconic scenes of Rio de Janeiro, to the rain forests of Amazonas and Pantanal, not to forget the authentic Afro-Brazilian states in North East Brazil. One of my favourites is the “Brazilian Caribbean” the state of Maranhão and the paradisiac archipelago of Fernando de Noronha about 500 km off the northeast corner of Brazil.

Text: Mr Jouko Leinonen, Ambassador of Finland to Brazil
Questions: Ms Anne Hatanpää, Finland Chamber of Commerce

Interview with Mr Jouko Leinonen, Ambassador of Finland to Brazil