Brazil is going through one of the hardest times in its history. The economy was destroyed by a series of events that no one saw coming. No one expected the China meltdown to translate into a massive slowdown in exports for Brazil. The Portuguese country was left holding an enormous amount of debt. Businesses began to close because China was Brazil’s largest trading partner. The export slowdown started more than two years ago, but the political turmoil as well as inflation, and weak currency kept Brazil’s economy in a state of contraction. The economy is expected to contract by more than 3 percent in 2016, and the outlook for 2017 isn’t much better. But there are a few bright spots. President Dilma Rousseff is in trouble, and if she is forced out that will translate into a more stable government, according to some business executives like Flavio Maluf, the CEO of Eucatex.
Maluf is an influential figure in the predominantly Portuguese nation. His family-owned company, Eucatex, has been in business since 1951 in Sao Paulo. Eucatex has been exported eucalyptus ceiling tiles around the world for the last five decades. When Maluf heard the news that Britain was leaving the EU, he got excited. Britain has been a difficult country to do business with because of the red tape involved with importing goods from Brazil. Maluf believes Britain might want to sign a bilateral agreement with Brazil to offset some of the imports that will be cut off by the exit from the European Union. It’s a little too early to tell, but there is a chance that Britain might want to take advantage of the attractive currency exchange that exists between Brazil and the UK.
Britain is still negotiating with the European Union. Some type of agreement will be reached in September, according to Maluf. Eucatex offices in Europe are planning for a positive outcome in Brazil when all the paperwork is completed. Maluf has been talking with British companies, and the reception he is getting is promising. But Maluf always says, “when the politicians get involved anything can happen.” Read a further breakdown from Flavio on his blog, as well as his Twitter account.