Although the world’s second largest emerging economy has provided investors with plenty of opportunities over the last few years, growth last year plummeted partly as a result of the country’s inadequate infrastructure.
In order to address investors concerns, the Brazilian government yesterday announced a massive $65.6bn investment in its transport infrastructure over the course of the next 25 years. Over half of that amount will be spent in the next five years, with a particular focus on the county’s roads and railways.
President Dilma Rousseff told reporters: “We are starting with railways and roads but obviously we will take care of airports, ports and waterways.”
Although the economy grew 7.5 percent in 2010, just a year later growth slumped to only 2.7 percent, while this year’s figure is expected to be under two percent.
Analysts reacted cautiously to the news, saying that although the package is welcome for the long-term prospects of the country, it may have little effect in the short-term.
Others pointed out the lack of infrastructure in Latin America showed that governments need to do more than just announcing policies. Bret Rosen, of Standard Chartered, told the FT: “The easy thing is making the announcements, the harder thing is execution, and the track record not just of Brazil but of Latin American countries in general is pretty poor on infrastructure.”