Brasília – The inflow of foreign direct investment (FDI) in Brazilian reached US$ 6.326 billion in September, 11.28% more than in the previous month and 11.7% more than in September last year. “It was the best September since 2004, FDI-wise,” said Túlio Maciel, the head of the Central Bank’s Economic Department, upon disclosing the bank’s Foreign Sector Report this Tuesday (25th).
According to him, the FDI inflow “was higher than we expected.” From January to September, the inflow stood at US$ 50.451 billion, already an annual record. The figure is more than twice as high as in the same period of 2010 (US$ 22.557 billion) and higher than the US$ 48.438 billion in the whole of last year. Since the inflow remains strong and there are still three months left until the end of the year, Maciel believes that the Central Bank’s US$ 60 billion forecast for the whole year “is a conservative projection.”
The services sector attracted the most funds throughout the year, followed by industry and the primary sector (agriculture and mineral extraction). The subgroups that received the strongest inflow were telecommunications, the metal industry, and oil and gas.
Coupled with the improved scenario, there is a favourable expectation regarding the trade surplus, according to the Central Bank economist. Although he admits that “this month the surplus will be lower” than the US$ 3.074 billion recorded last month, he is expecting an annual surplus of roughly US$ 29 billion because, year-to-date, exports grew by 32%, and imports grew by 28%. The expected surplus for this year is more than 43% higher than the US$ 20.221 billion surplus recorded in 2010.
In spite of the investment and foreign trade figures, the Central Bank is projecting a US$ 54 billion current account deficit this year, equivalent to 2.23% of the GDP. It will be the highest ever nominal deficit in the country, mostly due to foreign spending on services and remittances of profits and dividends, interest and wages, which stood at US$ 61.213 billion from January to September.
A total of US$ 27.838 billion were spent on international travel and transportation, equipment rental, royalties and licenses, computing and information, government services and insurance, among others. The remittances amounting to US$ 33.375 billion include profits and dividends, interest and wages.
In 2012, the rate of FDI is expected to decrease, said the chairman of the Brazilian Society of Studies on Transnational Corporations and Economic Globalization (Sobeet. Luiz Afonso Lima, in an interview to ANBA last week. the European debt crisis has already led to a decline in the number of announcements of new investment in Brazil, which should reflect on next year’s figures.
*With information from the ANBA Newsroom. Translated by Gabriel Pomerancblum
