Pre-pandemic position recovered in 2021 is maintained in the partial balance of 2022; best historical position was in 2011
Brazil is in 4th place in the ranking of foreign direct investment in 2022. The OECD’s 1st quarter report is the most recent on the balance of what enters and leaves countries to buy or capitalize companies, among other items.
The document released in April does not have data from Brazil because of the BC (Central Bank) strike. The number came out, but late. The criterion used in the OECD report is the directional principle, different from the concept used by the IMF (International Monetary Fund), which the BC normally discloses. O Power 360 shows the full picture.
Brazil also ranked 4th globally in 2021 with a balance of US$ 50 billion. The value is lower than the US$ 65 billion in 2019, but higher than the US$ 28 billion in 2020. The pandemic has brought down investments in the world. Even more so in Brazil. The country ranked 7th in 2020.
The OECD ranking is different from other global comparisons. Excludes Hong Kong, an administrative region of China normally treated as an independent economy, and also Singapore. The reason is that the money that enters these countries is usually directed towards investments in other places.
In 2011, Brazil achieved a balance of US$ 97 billion, nominal value at the time, the maximum since the beginning of the historical series (2005). They represented 5.6% of the world total. Brazil ranked 3rd in the ranking. It returned to that position in 2014. Then it got worse. It only returned to 4th place in 2019.
Robin Brooks, Chief Economist at the IIF (Institute of International Finance), published on his Twitter profile on Monday (12.Sep.2022) that foreign investments are returning to historic highs in Brazil even with the proximity of the elections.
Brooks had already mentioned that the growth prospects for Brazil in the coming years are very positive. He attributes the difficulties since 2014 to the exploration of shale gas in the US. This brought down oil prices. He stated that in the coming years it will not be like that. Brazil as an exporter of oil and other commodities will benefit.
Brazil’s position in the global investment ranking is another sign of the structural recovery of the Brazilian economy. Concerns about inflation (now subsiding) and fiscal impasses are not superfluous. But sometimes they hinder reading the bigger picture.
These are numbers that can eventually help President Jair Bolsonaro’s (PL) reelection project. A part of the electorate may consider it relevant that the conduct of economic policy brings positive prospects for the country.
Luiz Inácio Lula da Silva’s (PT) campaign can also say that investors feel optimistic about the possibility of him winning the election – or at the very least are not scared about it.
Which of the 2 is better for? The prospect of a bonanza is always more favorable to those in power. For the country, it is a good prospect regardless of the outcome of the presidential election.