Mixed Outlook For Brazil's Medical Devices Market Following Lula's Presidential Win

摘要

Key View: ? We hold a mixed outlook for Brazil's medical devices market as increased investment under newly elected President Lula, will be offset by a congress dominated by centrist and right-wing parties. ? Domestic production of medical devices will continue to grow at a rapid pace in Brazil. ? Favourable demographics and post Covid-19 recovery will be the driving forces for Brazil's medical devices market growth over the medium term. We hold a mixed outlook for Brazil's medical devices market as increased investment under newly elected President Luiz Inacio Lula da Silva (Lula), will be offset by a congress dominated by centrist and right-wing parties. In local currency terms, we have revised downwards our forecast in local currency terms and project that Brazil's medical devices market will grow at a 2021-2026 CAGR of 5.4%, and 5.3% in US dollar terms, taking the value to BRL29.8bn (USD5.5bn). The market will register low to mid single-digit growth between 2022 and 2026. We foresee that President Luiz Inacio Lula da Silva's win in Brazil's October 2022 presidential election will result in increased investment in healthcare, science and technology which will enhance the growth potential for the country's medical devices market. However, we expect this to be constrained by Lula's relationship with congress, as the body will be controlled by centrist and right-wing parties, with Lula's Partido dos Trabalhadores (PT) holding a minority of seats. Further, we forecast that real GDP growth in Brazil will fall to 1.1 % in 2023 from 2.7% in 2022, which, coupled with less market friendly policies under Lula, will place downward pressures on the overall medical devices market.