China May be Great, But Don’t Ignore Brazil
December 15th, 2009
Conspicuous Consumption, South of the Equator
As is the case in China, Brazil has a rapidly expanding economy. In fact, GDP growth this quarter is expected to check in at a tidy annualized rate of 9%.
As a result, unemployment is falling and incomes are rising. And that’s leading to an explosion in the middle-class.
Over the last four years alone, Brazil’s middle class has swelled by 24%, lifting roughly 20 million people out of poverty, according to Brazil’s Census Bureau.
Furthermore, the consultancy PriceWaterhouseCoopers LLP expects this rapid increase to continue. So much so, in fact, that it will propel Brazil’s largest city, Sao Paulo, from the 46th spot on the world’s wealthiest city list to fifth place in a little over a decade.
And I have no doubt all that newfound wealth will quickly be spent. Because it already is being spent! Consider this:
- High-end jeweler Tiffany & Co. (NYSE: TIF) boasts more stores in Sao Paulo than anywhere else in the world.
- Handbag maker Louis Vuitton – LVMH Moet Hennessy Louis Vuitton SA (OTC ADR: LVMUY) – earns some of its highest profits per square foot in Brazil.
- And consumer credit use is up roughly 30% per year for the last three years.
And despite all this, Brazil’s consumer-spending boom is still in its infancy. Thanks to a surging economy and stable inflation, we can expect more and more Brazilians to be able to afford their first mobile phones, cars, even homes in the years to come.
And if you want to know the hands-down, best way to profit from this trend, just read on.
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