Market Monitor - ICT Industry - Brazil

Market Monitor

  • Brazil
  • Electronics/ICT

21st May 2015

The ICT sector has seen a decline due to the economic downturn in Brazil, with decreasing demand, exchange rate volatility and high interest rates.

Market performance at a glance

Brazil

  • The Brazilian ICT market contracted 20% in 2014 and is expected to show another 10% decline in 2015, despite the fact that the government has extended several tax waivers (including its Digital Inclusion Programme) until 2018.
  • The sector is generally hampered by the current economic downturn and lower business investments.
  • The currently high interest rate of more than 12% and high inflation impact households’ spending power, while the public sector cuts expenditures due to austerity.
  • Another negative factor is the devaluation of the Brazilian real against the USD, given that a large share of ICT products is imported (about 70%) and denominated in USD. Although the main suppliers have hedging programmes to protect their distribution chain, a 10-15% price increase is expected.
  • Brazilian ICT businsses’ profit margins have strongly deteriorated over the past 12 months, and this negative trend is expected to continue.
  • ICT payment delays and insolvencies have increased in 2014, and are expected to rise further in the first half of 2015. The level of protracted payments and business failures is currently high.
  • Due to serious economic problems (decreasing demand, exchange rate volatility and high interests rates), our underwriting stance is restrictive.

Related documents

Download
Market Monitor May 2015

1MB PDF

Related content

Payment Practices Barometer the Americas

Report

Over 50% of very late payments went uncollected by businesses in the Americas.

Trade successfully with Brazil

Report

Doing business in Brazil can be challenging if you’re not used to the local business environment. The ten principles set out in this report can help make trading relationships lasting and successful.

Country Report Brazil

Report

The Brazilian economy is expected to grow only 0.3% in 2015 after 0.2% in 2014, as the much needed return to more orthodox economic policies will negatively weigh on growth in the short-term.

© Atradius Collections 1999 - 2018

Disclaimer

The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.