Can we bet on Brazil in 2017?

By Charlotte Turner, Managing Editor,
TRBusiness 

Fortunately for many travel retail companies in the Americas, there seemed to be a noticeable uptick in trade in the final quarter of last year, as trading conditions appeared to stabilize.

Many were finally able to push on with expansion plans and even see a return to growth; however, it would be complacent for the industry to assume that this trend will continue into 2017.

In order to more accurately predict the future, the industry often looks to analysts for guidance, particularly those who are tapped into one of the most important travel retail markets in the world: Brazil.

So when economist Silvia Matos offered her opinions on Brazil’s future at a seminar sponsored by the Brazilian Institute of Economics at Fundação Getúlio Vargas (FGV/IBRE), in late 2016, we expect that many were taking notes.

She suggested that while there are expectations that Brazil’s recovery is on the horizon, she doubts the country will be able to overcome its “crisis” in 2017.

This opinion is supported by the fact that the economy contracted 2.9% year-on-year in the third quarter of 2016 — another 0.2% from the previous quarter — as revealed by The Brazilian Institute of Geography and Statistics (IBGE).

However, in February of this year, economists at Credit Suisse Securities (CSS) upwardly revised their forecast for Brazil’s gross domestic product (GDP) growth in 2017 to 0.2%, up from zero.

US-Mexico relationship

Although Brazil is hugely important to many in our industry, others are actually more concerned about the impact of the U.S. President’s decisions on foreign policy and immigration — plus the implications for the country’s tourism industry.

Some have told TRBusiness that they are interested to see how the relationship between the U.S. and Mexico will evolve, and how it might ultimately affect their businesses. However, some said that they were not too concerned at this point, despite their vested interests in maintaining the current “porous” nature of the border.

“There are both Mexicans and Americans living in both countries,” DFA President Leon Falic told TRBusiness recently. “There’s a lot of speculation and there’s a lot up in the air right now, but when there’s a change that always happens.” As he intimates, sometimes, all we can do is wait and see.