Brasília – Foreign direct investment in Brazil reached US$ 66.66 billion in 2011, according to figures issued this Tuesday (24) by the Brazilian Central Bank. The result was higher than 2010’s, which was US$ 48.506 billion. In December alone, investment reached US$ 6.645 billion. The result sufficed to finance the current account deficit.
The current transaction account ran a US$ 52.612 billion deficit in 2011. In December alone, the deficit was US$ 6.040 billion. The 2011 figure was higher than that of 2010, which was US$ 47.323 billion, and was the highest ever recorded by the Central Bank, which started keeping records in 1947.
The deficit was equivalent to 2.12% of the Brazilian Gross Domestic Product (GDP). In 2010, the ratio was 2.21%. The current account concerns purchases and sales of goods and services. The calculation includes exports and imports of goods which comprise the balance of trade.
The trade balance posted a US$ 29.796 billion surplus last year. The balance of services (international travel, transport, equipment rental and others) recorded a US$ 37.906 billion deficit last year.
Remittances of profits and dividends, interest payments, and wages posted a US$ 47.319 billion. Current transfers ran a US$ 2.816 billion deficit.
The Central Bank figures show that foreign investment in shares (traded in Brazilian and foreign stock exchanges) recorded a US$ 6.198 billion surplus, much lower than the result in 2010 (US$ 37.684 billion). This year, a stronger inflow is expected, as the Central Bank’s projection is US$ 12 billion.
“Stock sales moved sideways last year. The turnover was weak,” said the head of the Central Bank’s Economic Department, Tulio Maciel. According to him, the forecast for this year points to a “moderate annual volume.” Maciel added that this type of investment is volatile and reflects investors’ perceptions of opportunities.
Preliminary figures for this month, up to Tuesday, show that the net inflow (outflows discounted) was US$ 3.033 billion. Regarding stocks traded in Brazil, the result was US$ 3.785 billion.
Foreign investment in fixed income bonds traded in the country recorded a net outflow (more funds going out than coming in) of US$ 63 million last year. This month, up to Tuesday, there has been net inflow of US$ 361 million.
Travels
The foreign travel bill, which includes revenues of foreigners in Brazil and expenses of Brazilians abroad, closed with a negative result of US$ 14.459 billion. This was the highest deficit ever since the Central Bank started recording the series. In 2010, the result was also negative, at US$ 10.503 billion.
In the whole of last year, Brazilian expenses abroad reached a record figure of US$ 21.234 billion, while expenses of foreigners on trips to Brazil totalled US$ 6.775 billion.
In the month of December alone, the international travel deficit was US$ 1.114 billion. Expenses of Brazilians abroad totalled US$ 1.764 billion and revenues of foreigners in Brazil totalled US$ 650 million.
According to Maciel, expenses of Brazilians abroad were boosted by the continued growth of the economy and of income in Brazil. But, starting in August, with appreciation of the dollar against the real, a period of lower expenses began. “The main influence is undoubtedly the behaviour of exchange rates,” he pointed out.
Greater expenses of Brazilians on international travels should be more moderate this year, according to Maciel. For 2012, the forecasted deficit is US$ 14.5 billion, similar to the figure for 2011.
Preliminary figures for this month, up to Tuesday, show that Brazilians spent abroad a total of US$ 1.293 billion. Revenues of foreigners on trips to Brazil reached US$ 450 million.
*Translated by Gabriel Pomerancblum and Mark Ament
