Economic Environment Research Paper Example | Topics and Well Written Essays - 1750 words

Economic Environment - Research Paper Example Air transport suffered a serious crisis in 2007, the network is in bad condition and needs to restored. The shortages of energy supply may hold back Brazil in terms of its economic growth (Datamonitor 2010). The government is the main buyer in the sector, although some forms of public-private partnerships have been established from 2006 (LAM 2010). The sector is characterised with consolidation and large players, and it has seen an entry of foreign investments in past couple of years. The industry reflects a stable and health growth and opens many opportunities for external players as the business environment in Brazil is improving. At 58th position in the Global Competiveness Report (WEM 2010), Brazil is relatively stable, a result of its two decade long fight for macroeconomic stability, economical restructuring and reducing income inequality. Methodology The further analysis of the business environment is made through the use of the PESTEL forces which provide more insight into th e challenges faced by the infrastructure sector of the construction industry. ... the quality of Brazilian institutions according to the Global Competitiveness Report (WEM 2010) is poorly assessed at 93rd position reflecting limited trust into the politicians, the political stability of the regime in the past decade, in particular the stability of the Brazil’s institutions, favours the growing economic development of the country (Lynn and Tang 2010:156). Economical environment Slightly affected by the global financial downturn, Brazil's economy recovered fast with expected annual GDP growth on 4-5% annually as in the pre-crisis period (Latin American Monitor 2010:6, IMF 2010:59). Brazil managed to weather the global crisis due to its small credit markets, a diversified economy, large domestic sector and a fiscally responsible administration (Lynn and Tang 2010:156). Other contributing factors were the high real prices of the commodity exports and the large private and public investments which continue to increase. In 2010 it is expected that the GDP will re bound to the pre-crisis 5,5%, led by a strong private consumption and investment (IMF 2010:59). The infrastructure segment of the construction industry across Brazil will benefit from large-scale corporate and public investment (Datamonitor 2010, 2010a). The political stability in combination with the macro stability and the relatively low public debt (48% of GDP and 84th rank in GCR (WEM 2010)) favour an increase in the public investments in infrastructure. However, high levels of burecruacy slow down the intensity of these investments (Economic Freedom Report 2010:40). It is expected that the activities in the infrastructure development will intensify in the following period due to the scheduled 2014 FIFA World Cup and the 2016 Olympics. As a result the Brazilian government has announced that