Reuters, 6/10/12
For many Brazilian executives, it was a day from hell. Last Friday, Brazil’s statistics agency published data showing the economy grew just 0.2 percent from January to March, marking a third consecutive quarter of stagnation – a shock for a country that only recently was booming.
Later in the day, São Paulo was brought to its knees by what city authorities described as its worst-ever traffic jam, with more than 295km of clogged roadways snaking through Brazil’s business capital and some furious commuters needing more than four hours to get home.
The symbolism was inescapable: Brazil has done a superb job of building and selling cars in recent years, but failed to build enough roads to accommodate them. Similarly, the economy as a whole has depended too much on stoking consumer demand and not enough on increasing supply by way of investment, resulting in terrible bottlenecks that have left Brazil at a standstill.
Some of Brazil’s top business leaders, speaking at a Reuters Latin America Investment Summit, said the demand-led model had probably run its course. They said that for Brazil to break out of its current logjam of annual growth rates below 3 percent, President Dilma Rousseff’s government would have to take bolder – and more difficult – steps to improve infrastructure and create a better investment climate.
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Posted by Brazil Institute 
Consumption-led growth reaches its limits in Brazil
June 11, 2012Reuters, 6/10/12
For many Brazilian executives, it was a day from hell. Last Friday, Brazil’s statistics agency published data showing the economy grew just 0.2 percent from January to March, marking a third consecutive quarter of stagnation – a shock for a country that only recently was booming.
Later in the day, São Paulo was brought to its knees by what city authorities described as its worst-ever traffic jam, with more than 295km of clogged roadways snaking through Brazil’s business capital and some furious commuters needing more than four hours to get home.
The symbolism was inescapable: Brazil has done a superb job of building and selling cars in recent years, but failed to build enough roads to accommodate them. Similarly, the economy as a whole has depended too much on stoking consumer demand and not enough on increasing supply by way of investment, resulting in terrible bottlenecks that have left Brazil at a standstill.
Some of Brazil’s top business leaders, speaking at a Reuters Latin America Investment Summit, said the demand-led model had probably run its course. They said that for Brazil to break out of its current logjam of annual growth rates below 3 percent, President Dilma Rousseff’s government would have to take bolder – and more difficult – steps to improve infrastructure and create a better investment climate.
Read more…
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