Commodities were the main support of 2006 for the Brazilian exchange traded fund (ETF). The iShares MSCI Brazil Index Fund (EWZ) is up 37% year-to-date. Looking forward into 2007, economists believe consumerism will be the next big growth area for the country.
Lower interest rates, higher wages and low-income programs run by the leftist government will mean everyone can buy "a cold beer, a mobile phone, or a new shade of lipstick", as BusinessWeek points out. The economy is predicted to expand by at least 2.9-3.5% next year, and the falling interest rates could mean more people take out mortgages, which in turn effects the banks and the real estate. Even the cosmetics company Natura is seeing a 22% increase in sales and has expanded into France. That sounds like a pretty picture.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.