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Spending growth makes Brazil top pick for BlackRock's Landers

Brazil's rapidly growing middle class has made the country less dependent on exports and more attractive to outside investors, says BlackRock's Latin America specialist Will Landers.

Domestic spending power is one of the key factors that has led Landers to highlight Brazil as his most favoured counrty in the region at the moment.

Inflation has been contained in Brazil and nominal interest rates are at historical low levels, he says. 'We expect the Brazilian Central Bank to reduce nominal rates to below 10% for the first time in my lifetime.'

'During President Lula's presidency, we have witnessed the emergence of a more solid middle class - 15% of the population that lived below the poverty line have moved up to the middle class and we now have 20 to 30 million people who weren't economically active a decade ago, now eligible for credit,' he says.

'This increase in affluence means that the economy is less heavily dependent on exports, which account for approximately 16% of the gross domestic product. This increase in wealth allows Brazilians to be less restrictive when it comes to their spending habits. This resilience, despite the world economic downturn, is one of the reasons for making Brazil our top pick among Latin American markets.'

Landers runs the BGF Latin American fund at BlackRock and also contributes ideas for the Latin American segment of the group's global emerging markets fund, now lead-managed by Plamen Monovski

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Will Landers
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8/29 in Equity - Latin America (Performance over 3 years) Average Total Return: 28.49%
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