In 2016, a Moody's Investors Service report had grim news for Brazilian corporations. The number of Brazilian businesses with funding risks had risen to 33 percent.
The country's worst recession in decades coupled with highly publicized corruption scandals made for bleak predictions for companies. That same year, the number of businesses filing for bankruptcy rose by 150 percent as the government scrambled to introduce quick fixes in the form of debt forgiveness programs to prevent the nation's biggest businesses from going under.
Fast forward to today.
A day of reckoning of sorts has come for some of Brazil's biggest businesses to settle their debts and move on. State-owned oil behemoth Petrobras settled a $2.95 billion debt to American investors who took losses during the company's corruption scandals unearthed by Operation Car Wash. Odebrecht, the construction company that was also at the center of Operation Car Wash's investigations for offering kickbacks in exchange for building contracts, paid large amounts in compensation to U.S. and Latin American investors. Phone company Oi recently agreed to a $19 billion debt restructuring plan. The largest meatpacking company in South America, JBS, has a settlement agreement in the works to compensate for money lost by its clients amid bribery charges that caused shares to plummet by 50 percent.
Putting closure to their scandals has caused investor confidence to return. Petrobras shares have quadrupled since 2016, and JBS has wooed many American investors back. And now, Brazil is finally experiencing an economic recovery.
As the country's largest companies take the lead in moving on from the scandals and debt-ridden financial crisis, the rest of the country is feeling the recovery. Stocks are rising steadily and business confidence is ranked at its highest since 2014. The retail industry is also slated for an uptick, as are meat producers.
Though some fear the elections could rock the economy's boat, especially when anti-market former President Lula is potentially slated as a candidate, others believe (and hope) the economy will ride through the chaos of the upcoming elections and see to a bright future ahead.
