Japan and Brazil Economic Outlook Brazilian Development Prospects XVII Joint Meeting of the Japan-Brazil Committee September 9-10, 2014 1

The world: times of catching up and increasing relevance of developing nations Annual Growth Rates, % Avg Growth 2008-2008 2009-2014 2009-2018 Advanced Economies 2,4 1,0 1,6 Emerging Markets 6,5 5,2 5,3 Source: IMF, WEO

Brazil, macroeconomic fundamentals Gross Debt Consolidated Public Sector Net Debt (as % of GDP) International Reserves (US$ billion) Arquivo para atualização deste gráfico pode ser encontrados em: “T:\DAE\APRESENTAÇÕES\kit gringo\201306” Arquivo: “Gráficos_dados fiscais.xlsx”

Brasil: Macroeconomic fundamentals (2) CPI Inflation (IPCA index, % YoY) Current account results, % GDP Source: IMF World Economic Outlook Database, October 2013; IBGE

Brazil: Economic and Social Progress Job creation Income classes, millions of people Source: Ministry of Finance *CAGED: 2013. 2014 **12 months up to feb 14 Formal employment and unemployment rates Brazil vs USA and Europe, unemployment rate, desazonalised, % Source: BCB

Public investments in education (% of GDP) Economic and social progress (2) Poverty and inequality trends GDP per capita, R$ thousand - 2013 prices Public investments in education (% of GDP)

Attractive and expanding internal market O caminho para os gráficos é: “T:\DAE\APRESENTAÇÕES\kit gringo\201306” Arquivo: “Infra.xls” Sources: National Agency for Civil Aviation (ANAC), National Agency for Aquatic Transportation (ANTAQ), Brazilian Association of Highway Concessionaires (ABCR) and Brasilian Association of Automative Vehicle Manufactures (ANFAVEA).

Brazil: potential of agriculture, oil and exports IMF EXPORT GROWTH PROJECTIONS

Brazil: investments forecast 2014-2017 Source: BNDES

Brazil: investments forecast for industry, 2014-2017 Atualizações: Solicitar novos números do Perspectivas do Investimento ao DEPEQ/APE (Gerente André Sant’Anna). Source: BNDES 10

Brazil: investments forecast for infrastructure, 2014-2017 Atualizações: Solicitar novos números do Perspectivas do Investimento ao DEPEQ/APE (Gerente André Sant’Anna). Source: BNDES 11

Ongoing program of infrastructure-related concessions

BNDES BNDES – highlights and comparison with peers 2012 (in US$ billion) 2/3 of long term loans in Brazil 100% State owned Stable institutional funding Instruments Direct Operations Indirect Operations MSME (financing and guarantee) Exports (Pre and Post shipment) Project finance Grants Investment bank   BNDES KFW CDB JFC Assets 367.8 657.3 1,191.6 318.4 Outstanding Loans 254.0 526.4 1,016.9 272.4 Net Profit 3.0 3.1 9.9 -3.6 ROA (%) 0.90 0.47 0.92 -1.13 NPL (%) 0.06 0.21 0.30 2.98 Source: Banks' balance sheets. Equity Portfolio Estimated market value (US $ b.) 45.4 Nº firms with direct support 203 Nº Investment Funds 44 Source: BNDES 13 13

BNDES’ contribution to Brazilian development (1) *12 months, up to February/2014 to 2013 Atualização: Checar com Gilberto Borça. T:\DAE\APRESENTAÇÕES\kit gringo\201306\BNDES_Aprovações&Desembolsos.xlsx

BNDES’ contribution to Brazilian development (2) 41 53 104 172 231 261 275 8 11 12 23 25 32 -5,0 5,0 15,0 25,0 35,0 45,0 55,0 65,0 50 100 150 200 250 300 350 2007 2008 2009 2010 2011 2012 2013 Support for MSME: disbursements + number of firms Number of MSME, 1,000 Disbursements, US$ billion)

Main takeaways Economic and social inclusion will generate opportunities to rise the consumption of goods and services and expand the housing industry. Expanding ongoing infrastructures (telecom, energy and logistics) will induce systemic productivity, improve standards of living and increase demand for suppliers of goods and services. Oil and gas will be a relevant source of foreign revenue and vast opportunities for the supply industry. Due to its consolidated competitiveness, the current export base (mineral and agricultural commodities) will continue to offer investment opportunities. Industry and services in Brazil still require higher investment in capabilities and innovation to induce international competitiveness. The real economy provides vast opportunities for private financial industry to enter into long-term financing.

Japan and Brazil Economic Outlook Brazilian Development Prospects XVII Joint Meeting of the Japan-Brazil Committee September 9-10, 2014 17