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).
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.
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.