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  • Brazil's Economic Recovery, Opportunity to Export Automotive Products

    Brazil's Economic Recovery, Opportunity to Export Automotive Products


    - Brazilian economy is recovering from crisis. Need to expand exports of consumer goods -


    Automotive parts and electrical appliances were selected as the most promising items to export to Brazil, where the economy is recovering. In terms of market and product diversification, it is pointed out that exports of consumer goods should be further increased.



    The Institute for International Trade (President, Shin Seung-kwan) of the Korea International Trade Association studied Brazil's economic recovery status as well as prospects and analyzed the possibility of diversifying export markets in the report titled "Economic Recovery in Brazil and Opportunities for Export market Diversification."



    According to the report, the recovery of the Brazilian economy is a great opportunity for Korea at the time of its export market diversification is emphasized as the country’s dependency risks of exports on the United States and China have been highlighted. Last year, Korea's exports to Brazil grew by 23.5 percent, and its ranking of export destinations jumped from 23rd to 20th compared to the previous year. Major export items such as semiconductors, automobile parts and automobiles, flat panel displays, sensors and synthetic resins all recorded double-digit growth. However, the export volume of consumer goods is still insignificant despite the high growth rate of 57.4 percent. 



    Among the 15 promising export items selected by the Institute for International Trade considering comparative advantages, export potential, market growth potential, and beneficiary of import boom and so on, five automobile parts and two other automobile-related items were on the list. In particular, the Brazilian automobile market is forecast to grow by 11.6 percent this year, following the 9.2 percent of growth last year. 


    Brazil has fallen into a serious economic crisis in 2015 and 2016. Economic growth slowed down to 0.5 percent in 2014 and 3.8 percent and -3.6 percent in 2015 and 2016, respectively. However, the economy began to recover from last year, gradually escaping from negative growth. After the growth rate in the second quarter of 2017 jumped to 0.4 percent, the growth in the third quarter increased to 1.4 percent.


    Yoo Seung-jin, a researcher at the IIT said, “Despite the fact that the pension reform to secure fiscal soundness and the political stability after the presidential election this year will remain as challenges, the Brazilian economy is expected to maintain its growth this year.” The researcher also stated, “The conclusion of a trade agreement between Korea and Mercosur (South American trade bloc), which includes Brazil, will serve as an opportunity for Korea’s manufacturing exports to become more resilient. Particularly, if Korea targets Brazil's huge consumer market by enhancing its competitiveness of consumer goods, it will be helpful to diversify export markets.

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