São Paulo – Foreign Direct Investment (FDI) should total US$ 5.5 billion in June, according to estimates by the Central Bank. If the projection is confirmed, there should be a reduction as against the same month last year, when they totalled US$ 5.8 billion. Up to the 19th, the net inflow was US$ 3.6 billion.
In the month of May, FDI was US$ 3.8 billion, above the US$ 2.8 billion expected. Over the last 12 months, ending in May, the FDI flow has reached the highest level since December last year, at US$ 64.2 billion.
According to the head of the Economic Department at the institution, Tulio Maciel, investment is evolving according to the Central Bank’s forecast, with inflow of US$ 65 billion this year.
Foreign investment in fixed income in Brazil in June, up to the 19th, has already exceeded the total from January to May, with US$ 4.9 billion, against US$ 4.17 billion in the first five months of the year. The inflow is due to the government’s decision, announced early this month, exempting investment in fixed income in the country from paying the Financial Operations Tax (IOF).
But there was net outflow of foreign funds in shares, US$ 3.5 billion. From January to May, the inflow was US$ 9.7 billion. According to Maciel, investors may be migrating from investment in shares to fixed income, due to the cancellation of IOF. “It is possible that the partial result for June, with shares being dropped and inflows in fixed income, to some extent, may reflect that,” he said.
The Central Bank has also stated that the balance between the country’s inflow and outflow of dollars in the financial sector (investment in papers, profit and dividend transfer abroad and FDI, among other operations) was US$ 209 million negative this month up to the 19th.
In the same period, the trade flow (reflecting import and export operations) was also negative, US$ 488 million. With this, the exchange flow in the period is recording a negative balance of US$ 697 million.
Foreigners
Brazilian expenses abroad totalled US$ 2.232 billion in May. This was the strongest result for months of May, in the BCs historic series, which began in 1969. In the same month last year, these expenses totalled US$ 1.829 billion. From January to May, spending of Brazilians totalled US$ 10.370 billion, against US$ 9.019 billion recorded in the five months of 2012.
Maciel pointed out that international travels are sensitive to dollar exchange rates, which are on the rise. However, Maciel said that revenues of Brazilians are still on the rise and that stimulates trips abroad. Apart from that, according to him, many tourists buy international travel packages in advance. For this reason, the growth of the dollar cannot have immediate effects on reduction of spending abroad.
Preliminary figures this year, up to the 19th, show that spending on travels reached US$ 1.286 billion. Revenues transferred by foreigners in Brazil totalled US$ 320 million in the period. In May, foreign revenues in Brazil totalled US$ 521 million, as against US$ 532 million in the same period last year.
*Translated by Mark Ament. With information Agência Brasil
