Feiplastic ’19: Braskem expects continued Brazil growth despite lower outlook

SAO PAULO (ICIS)–Braskem expects Brazil’s GDP will continue growing, even though economists have lowered their outlook for the economy, an executive said on Monday.

Brazil’s central bank conducts weekly surveys in which it asks economists to forecast GDP growth. Their forecasts for GDP growth fell to 1.71% from more than 2.50% at the start of the year.

Those forecasts fell in part because the economic reforms being pursued by Brazil’s new president could take longer than anticipated.

Nonetheless, Brazil’s economy should continue growing, said Edison Terra, vice president of Braskem’s business unit for polyolefins, renewables and Europe. He made his comments on the sidelines of the Feiplastic plastic trade show.

Brazil’s economic recovery has been consistent since its deep recession in 2015-2016, during which GDP fell by more than 3% annually.

Braskem is seeing demand grow for polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC), with its customers investing in new capacity, Terra said. “We are optimistic.”

If Brazil adopts economic reforms, then that should further increase economic growth.

For automobiles, 2018 was a good year in terms of production and plastics consumption, Terra said. Automobile demand could increase further if interest rates for car loans were lower and if more consumers had access to credit.

Although investment in infrastructure has room for improvement, Braskem expects this could change in the future, Terra said.

The construction industry has been one of the slowest to recover from the recession, and it has continued to lag, Terra said. Still, activity is picking up, and the PVC market grew by 1.4% in 2018 after four straight years of contraction.

The Feira Internacional do Plastic (Feiplastic) takes place on 22-26 April in Sao Paulo, Brazil.

Interview article by Al Greenwood