How expensive are products made in Brazil?

Brazilian products are on average 34.2% more expensive than a similar product made somewhere else.

What are the reasons?

The Brazil cost, followed by the appreciation of the Brazilian Real, explain the economic stagnation the country is facing. Those are the findings of a recent study prepared by the Federation of Industries of the State of São Paulo (Fiesp).

FIESP siege in Av Paulista, São Paulo

Brazil versus its trading partners

Faced with trading partner countries such as Germany, Argentina, Canada, Chile, China, South Korea, Spain, USA, France, India, Italy, Japan, Mexico, the UK and Switzerland, goods manufactured in Brazil are 34.2% more expensive.

Brazil versus industrialized countries

The competitiveness gap is still substantial even when compared with industrialized countries such as Germany, Canada, South Korea, United States and United Kingdom.  Goods produced in Brazil are 30.8%.

Brazil versus other emerging countries

The difference increases when the comparison is made with other emerging countries. Argentina, Chile, China, India and Mexico are much more competitive than Brazil. Products made in those countries are up to 38% less expensive than the same item produced made by Brazilian companies.

Paulo Skaf and Salomão Schvarztman

Fiesp represents the industry of the power house in Brazil and the institution has been active in defending Brazilian competitiveness. “The Brazilian government needs to create the conditions for those who produce and work in Brazil to compete with the rest of the world,” urged Paulo Skaf in an interview to Band News.

What is the Brazil cost (Custo Brasil)

The Brazil cost takes into account six groups of expenses: taxation (charge and bureaucracy) cost of working capital, cost of energy and raw materials, cost of logistics infrastructure; costs extra services to employees and non tradable services costs. In this category are expenses that are not exposed to foreign competition, such as: health, hairdresser.

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About Hildete Vodopives

Hildete de Moraes Vodopives is founder of Brazil Global and of the Harvard Strategists Bureau. She is a member of the Brazilian Investment Analysts Association (APIMEC-Rio) where she served as Corporate Relations Director and later, on the board. Hildete advises companies doing business in Brazil. She lives between Paris and Rio and is a member of the Harvard Club of Paris and of the Mercosur Women’s Forum.
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One Response to How expensive are products made in Brazil?

  1. Garrett says:

    As a developING nation, Brasil is doing well as the 6th largest global economy — however, having an economy larger than the UK, and closing in France and Germany (which means Brasil will have an economy larger than Europe within the next 5 yars), can Brasil be viewed as, or can if afford to behave as, a developing nation???…

    What is tolerated can’t be changed — and Brasilians, by their culture, embrace toleration. Until Brasilians learn to stop tolerating the status quo (or any other country for that matter), then the status quo remains. Those from outside see this (as does Brasilians see this of other countries) as a sign of embracing mediocrity and not desiring to move ahead… Once you lead a horse to the water, doesn’t mean he’s going to drink it — he has to be thirsty for it… But, and something to think about: refusing to drink that water it also means he has lost all rights to complain about not having had an opportunity for water… The onus is now on the ‘horse’ — in this case, Brasil.

    If toleration and mediocrity is what Brasilians want, that is their right — but they also lose many other rights in doing so… Like having a growing economy that can compete globally, like having an infrastructure that doesn’t have a mind of its own…

    Like

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