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World trade to grow by 86% in the next 15 years (2012-2026) International trade growth will accelerate from 2014 Companies to increase trade activity by 4.70% annually to achieve projected growth

Fastest growing emerging sectors support trade infrastructure and the transportation of goods around the world Brazil's trade growth from 2012 to 2026 will be 162.79% Brazils companies to increase trade activity annually by 6.19% over the next 15 years Growth over the next 15 years will be fuelled by Brazils export of unwrought, powder form gold to Canada, which is

forecast to grow at an annualised rate of 20.10%

Trade overview

Brazils trade outlook

HSBC Global ConnectionsTrade Forecast Update: Brazil February 2012

As the world continues to face well-documented economic challenges, the Trade Forecast suggests grounds for optimismfor international businesses. Despite the current climate the overall trend for international trade is positive with growthacceleration sooner than expected from 2014, rather than 2015. After 2014 the global economy ends a period of slowgrowth and contraction and sees an upturn in trade in line with GDP forecasts. Over the next five years it is forecast thatworld trade will grow at an annualised rate of 3.78% (see below graph for year-on-year predictions), due primarily to theexpectation of an earlier recovery of the overall global economy. In the period 2017-2021, the Forecast predicts even

more rapid annualised growth at 6.23%, as world demand for traded goods recovers its dynamism. As a result world tradeis predicted to grow by 86.00% in the next 15 years, taking total trade activity in that year to $53.8 trillion.

Brazils trade will increase at a much faster rate than is average for the world to 2026, and is expected to be 162.79%.

This high level of growth accelerates after 2015 in both Latin America and Asia Pacific. Brazil will play a major role indriving this as a route into the Latin America region and as its trade with Asia and Europe grows. Brazils export trade is

dominated by agricultural commodities, cars and infrastructural commodities and on the import side by commodities suchas oil and iron ore, alongside a growing presence in the manufacturing sector (particularly automobiles, turbo enginesand automotive components).

Forecast exploring the future of world trade and the opportunities for international businesses

Brazils trade index, based to 2011, will increase at a much faster rate than is average for the world. Brazils index of tra degrowth is currently 4.76% above the index of world trade growth. By 2016 it will be 26.82% above and by 2026 growing at

some 67.22% above world trade averages. Growing trade within Latin America is an opportunity for Brazil: as its largesteconomy, Brazils it is central to the emergence of supply chains and trade corridors as well as to the development of

infrastructure and trade growth outside of the region.

Annual growth rates year on year, Brazil and world 2012-2026

0.00

50.00

100.00

150.00

200.00

250.00

300.00

Annualised,

indexedat2011

Brazil 111 .62 121 .72 130 .38 139 .31 147 .19 154 .72 167 .81 188 .48 197 .18 212 .52 222 .77 233 .64 244 .64 255 .58 266 .47

World 106 .86 111 .21 113 .93 117 .46 120 .37 125 .35 138 .88 153 .56 157 .11 162 .80 168 .85 176 .88 185 .32 192 .64 199 .25

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Alan Keir, Group Managing Director and Global Head, HSBC Commercial Banking:

"Where once businesses followed economic investment, now, forward-thinking companies lead, taking matters intotheir own hands and making business happen. Whether that's taking advantage of shorter-term growth in

international trade, which despite economic uncertainty sits at $1trillion a year, or by creating new supply chainsthat open up trade corridors, businesses are connecting themselves to future opportunities. The reality is thatgrowth opportunities lie internationally. The companies that succeed will be planning for that today."

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Trade corridors and trends

Brazils largest export partner is Argentina with export trade forecast to grow over the next five years at an annualised rate of6.93%. An emerging automotive sector in Argentina dominates exports of car components which the forecast predicts willincrease by 10.68% annually to 2016. A large amount of trade between Brazil and the USA (the second largest export partner)is in oil: Brazil exports of crude oil here are forecast to increase by 7.53% annually to 2016. Growth in exports of coffee to theUSA is also expected to be substantialat an annualised rate over the same period of 8.42%. The Netherlands is Brazilsfourth largest export partner with growth driven by exports of Soya cake and wood pulp for paper. Brazils key import partnersare the USA, China and Argentina and the Trade Forecast is predicting substantial annualised growth in imports from each ofthese countries by 8.81%, 11.55% and 7.56% respectively to 2016. The USA will increase its imports of refined oil over thenext five years at an annualised rate of 15.14%. China will increase its imports of a selection of consumer electronics. There isa growing trade corridor in the automotive sector between Argentina and Brazil which accounts for a substantial share of theincrease in imports from Argentina. Emerging import partners include Mexico, forecast to increase its imports of cars over the

next five years by 13.23%, Vietnam, Turkey, Colombia, Venezuela and Uruguay.

Sector watch

Sector opportunities

Agricultural commodities: Despite its emerging manufacturing sector and progress up the international trade value chain thedominant feature of Brazils trade is agricultural commodities. Exports of soya cake to the Netherlands are forecast to grow by9.36% while exports of soya bean to Spain will increase by 6.96%, all annualised to 2016. Exports to India of solid sugar caneand sugar beet will increase by 17.76%, exports of coffee to the US and Germany by 8.42% and 7.53% and exports of meat,offal and poultry to Saudi Arabia by 9.21% all annualised to 2016. These countries emerge as growing corridors, but the bulk ofBrazils trade in this sector is within Latin America. As the sector grows beyond the region agricultural businesses need to keeppace with change and develop infrastructures that support international trade. Businesses will need to increase theirinternational activities by between 8.37% and 10.91% depending on sector to take advantage of the opportunities presented.Automotive industry:Brazils automotive sector is established around Sao Paolo and has been fully integrated into the Germanautomotive supply chain since the 1970s. Imports of cars and car components are beginning to grow as manufacturers takeadvantage of the cluster of automotive industry expertise that has developed in Brazil. For example car component imports

generally will increase annually by 5.50% to 2016. Brazils exports of cars will increase by 4.13% annually to 2016; as cars areamong Brazils largest export sectors, this is a substantial amount. Growth in this sector represents a real opportunity forbusinesses to take advantage of established distribution and supply chains by working with large, global suppliers. They willneed to grow their international activities at an annualised rate of at least 4.13% annually over the next five years to keep pace.Oil and commodities:Oil trade is vital to Brazils trade flows and will become more important as its oil supply becomes moreestablished. The Trade Forecast predicts that crude oil exports to China will increase by 11.04% and this will drive the overallincrease in exports of crude oil annually by 9.22% to 2016. Brazil imports much of its refined oil and these imports will increasealongside as Brazils growth. Two emerging import partners in this sector are the USA and Algeria. Alongside this is growth inimports of commodities such as coal from the USA and refined copper from Chile which will fuel the development ofinfrastructures to support the growing export trade in oil and commodity infrastructures. Exports and imports are not limited toLatin America and, as the world grows, so too will demand for oil and commodities. Businesses in mining and constructionengineering have huge opportunities to build this sector over the next f ive years and will need to grow their international activitiesrapidly in order to take advantage of this.

Brazils Emerging Growth Importers and Exporters (2012-2016)

Brazils Largest (2012) Export

Partners Ordered by ValueCAGR (2012) Emerging Growth Export

Partners% Brazils Largest (2012) Import

Partners Ordered by ValueCAGR (2012) Emerging Growth Import Partners %

Argentina 6.93% India 14.23% USA 8.81% Vietnam 14.78%

USA 1.16% Bahrain 12.91% China 11.55% Turkey 13.82%

China 8.29% Vietnam 12.74% Argentina 7.56% Colombia 13.28%

Netherlands 8.22% Indonesia 12.01% Germany 8.48% Mexico 12.27%

Germany 6.95% Bangladesh 11.15% South Korea 12.08% South Korea 12.08%

Japan 6.96% Switzerland 10.77% Japan 9.21% Austria 11.84%

Venezuela 7.04% Malaysia 10.20% Italy 9.21% Venezuela 11.69%

Russia 5.71% Saudi Arabia 9.82% France 7.90% China 11.55%

United Kingdom 9.52% UAE 9.70% Chile 7.24% Uruguay 11.32%

Chile 3.71% South Korea 9.62% India 10.95% India 10.95%

Brazils Fastest Growing Export and Import Sectors by Partner (2012-2016)

Export Sector Export Partner CAGR

(2012-16)

Import Sector Import Partner CAGR(2012-16)

Solid cane or beet sugar and chemically pure sucrose India 17.76% Motor vehicles for transport of persons (except buses) South Korea 16.39%

Chemical wood pulp, soda or sulphate, not dissolving China 11.09% Oils petroleum, bituminous, distillates, except crude USA 15.14%

Petroleum oils, oils bituminous minerals, crude China 11.04% Electric apparatus for line telephony, telegraphy China 14.34%

Parts and accessories for motor vehicles Argentina 10.68% Oils petroleum, bituminous, distillates, except crude Algeria 13.57%

Iron ores and concentrates, roasted iron pyrites South Korea 10.35% Motor vehicles for transport of persons (except buses) Mexico 13.23%

Soya-bean oil-cake and other solid residues Netherlands 9.36% Parts, accessories, except covers, for office machines China 11.17%

Meat, edible offal of domestic poultry Saudi Arabia 9.21% Motor vehicles for the transport of goods Argentina 10.91%

Iron ores and concentrates, roasted iron pyrites Germany 8.80% Motor vehicles for transport of persons (except buses) Argentina 10.72%

Iron ores and concentrates, roasted iron pyrites Japan 8.67% Automatic data processing machines (computers) China 10.33%

Chemical wood pulp, soda or sulphate, not dissolving Netherlands 8.43% Coal, briquettes, ovoid etc made from coal USA 10.04%

The table below shows Brazils fastest growing export and import sectors by partner:

HSBC Trade ConnectionsTrade ForecastThe Trade Forecast predicts how trade is going to develop over the next five, 10 and 15 years. It forecasts overall trade growth (exports, imports and total trade) globally, in global regions,and individual countries. Spanning 37 countries, it covers the top 10 sectors for exports and imports for each of these. The forecast has a unique approach to understanding the drivers oftrade from a business perspective, informed by: trade trends, macroeconomic and market influences trade (for example GDP, oil prices, inflation, foreign direct investment), and businessenvironment influences on trade (including regulation, demographics, access to capital and finance). The research has been co mmissioned by HSBC and undertaken by DeltaEconomics. The economic and business narratives stem from a broader documentary search that includes material from National Statistical Offices, the World Bank and InternationalMonetary Fund, economic blogs, the Economist Intelligence Unit, Bloomberg, the Financial Times and other professional and financial services news websites.

About HSBCCommercial BankingHeadquartered in London, HSBC is one of the largest banking and financial services organisations in the world. HSBC is one of the world's most international commercial banks with overthree million customers in more than 60 markets.

N.B. Emerging Growth Import and Export Partners are trade partners that are growing most quickly over the period, albeit potentially from a small base.

N.B. Fastest growing import and export sectors by partner are developed from the top 50 export and import partners and are selected alongside the trade sectorsthat constituted values of above $100 million at the end of 2010. The top ten fastest growing partners by sector were selected for this table.