Evolving Growth Play
As Brazil’s middle-income segment continues to grow, a straightforward equities buy has become trickier stock-picking terrain. Inflation and government policy are the biggest risks.
by Ben Miller
Brazils GDP has been growing at 3%-5% for most of the
last 10 years, but the Brazilian consumers growing power
is still the play equities investors love to talk about. Even
those late to tune in to the EM game understand that a major
demographic shift is underway, and still has room to grow.
The classe C or C class, as the middleincome
segment is called, in Brazil had come to represent 51% of the
population by 2009, up from 38% in 2003, according to the
Fundação Getúlio Vargas (FGV). The
Brazilian university expects it to reach 56% by 2014.
Definitions of the C class vary, but the FGV classifies it as a
family income of 1,126 reais to 4,854 reais per month.
All this has meant strong and growing companies in
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