Brazil Freight Transport and Shipping Report Q4 2017
Growth will be positive across all freight modes in Brazil in both the short and medium termand we envisage annual growth to increase incrementally between 2017 and 2021. Brazil's concessionsprogramme is scheduled to see a flurry of transport auctions in H2 2017, which is welcome news for thevarious modes going forward. The next major test for the programme will be the auction of the 30-yearconcession for the North-South Railroad, the first railway concession to be launched under the programme.
Total trade growth in real terms will also be positive in 2017 and will grow in momentum as of 2018.Key Updates And Forecasts
We are downbeat on Brazil's economic growth over the coming five years, which will restrain thecountry's freight modes to some extent over the short term at least. Heavily indebted consumers andneutral fiscal policy will constrain consumption, while the modest scope of reforms and continuedpolitical volatility will limit investment. We believe that for Brazil to achieve more robust growth eithercommodity prices would need to rise materially above our current forecasts, or more substantive reformsto the pension system and labour market, among others, would need to be enacted.