Brazilians are optimists by nature. Even in the face of
overwhelming evidence to the contrary, business leaders are
invariably upbeat about the long-term prospects for their companies
and the country. And the mood this year, according to a survey by
Boucinhas&Campos, a São Paulo consultancy, is as unrelentingly
upbeat as ever. Nearly all executives polled say they expect
business in 2002 to be the same or better than in 2001, which was a
difficult but not entirely bad year. The reasons for their optimism
are clear. When asked which factors would help their companies the
most this year, nearly half replied that they would welcome a
stable real and lower interest rates. They would also welcome a
more benign international climate. Economists say they can look
forward to an improvement on all three fronts, and the government
has already curtailed power rationing.
Source: Exame and
Boucinhas&Campos Consultores
When asked what could go wrong and how it would affect them,
executives said they worry about further interest rate increases
followed, paradoxically, by a weaker real. Lower interest rates are
always welcome, but Brazilian companies face a heavy interest and
debt amortization bill this year so they would also like a stronger
real to make payments on their dollar debts more affordable. Fewer
companies are bothered about the effects of a stronger real and
rising inflation since economists consider both outcomes to be
likely. The October presidential elections are a remote concern for
businesses, which still worry more about the risks of more
electricity rationing. Power cuts last year forced them to buy
their own generators or cut output, which hit earnings at most
companies.
Source: Exame and
Boucinhas&Campos Consultores