Lise Alves, Contributing Reporter
SÃO PAULO, BRAZIL – Foreign direct investment (FDI) inflows in Brazil decreased by two percent in 2013, in comparison to 2012, and the country fell from fourth to fifth in the United Nations Conference on Trade and Development (UNCTAD) FDI ranking.
These latest FDI results were included in the Global Investment Report released by UN agency last week. This is the first decline in this type of inflow in the country since 2009. Now Brazil is ranked behind Hong Kong, Russia, China and the United States in the volume of long-term foreign investments coming into the country.
The report shows that Brazil registered a decline of two percent in FDI, from US$65.3 billion in 2012 to US$64 billion in 2013. With the decline, the country’s participation in global investments went from 4.9 percent in 2012 to 4.4 percent last year.
Nonetheless, the report notes that foreign investors continue to be interested in Brazil’s productive potential, especially those in the automobile industry. Local media reports show that not only traditional automakers, such as Volkswagen, Toyota and Renault are planning to increase their production capacity in the country but newcomers such as Chevy and Hyundai also have plans to increase their operations in Brazil.
Foreign direct investments are considered to be the best type of investments for a country to obtain, since unlike speculative and stock market investments, these are long-term investments directed towards improving the country’s infrastructure, research capabilities and production.
For 2014 the Brazilian government forecasts an even lower FDI inflow. The latest data from Brazil’s Central Bank shows that although FDI inflows for the first five months of the year were higher than during the same period in 2013 (US$25.34 billion against US$22.85 billion) the country is only expected to receive US$63 billion in 2014 through FDI.
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