Investing in São Paulo, Brazil Makes Perfect Sense

Swimming Beach - ResizedSão Paulo is the 10th richest city in the world, and has several factors which recommend it to foreign investors. It is politically stable, and has enough resources to be self-sufficient, but perhaps most importantly the residents of this city have an extremely American outlook, in that they spend heavily and save little, so the consumer market here is huge.

Incredibly São Paulo is richer than Shanghai, Hong Kong, Moscow, Mumbai and Buenos Aires. PricewaterhouseCoopers has predicted it will be the sixth richest metropolitan area in the world in just 15 years. If true, this will put it ahead of Paris, Philadelphia and Osaka.

Although Brazil is one of the BRIC economies, it is slightly different from the other members of this exclusive group. One of the major factors in its favour is its abundant supply of commodities, and the fact that it produces all its own energy. It’s a very stable country, and has no real ethnic or territorial disputes. Perhaps most importantly, Brazil is making a real effort towards improved income for all its citizens.

The average age of Brazilians is just 29, considerably younger than China’s 34, and well below developed countries like Italy, Germany and Japan at 43. Like Americans, Brazilians love to shop, but unlike Americans they do so without huge exposure to credit. This has led some to compare the consumer economy in this country to post-World War II America, which is when the consumer boom really began to take off, leading to a very profitable economic cycle.