RIO DE JANEIRO, BRAZIL – In the third quarter of last year, the investment rate in the Brazilian economy reached 19% of GDP. This is the highest level since the second quarter of 2015, when it also stood at 19%. And a considerable rise from the 15.7% in the third quarter of 2020.
However, according to a study by researchers at Ibre/FGV, these figures were driven by punctual factors, and do not indicate robust economic activity.
In the third quarter last year, while overall inflation accumulated a 9.9% year-on-year rise, investments measured by the Gross Fixed Capital Formation (GFCF, a measure of investments in GDP) had risen 15.3%.
Two other occasional phenomena would also be behind this growth. The first is the abrupt internalization of oil platforms, due to a purely accounting operation: the change in Repetro, which allowed companies to transfer their ownership of the equipment from foreign subsidiaries to the Brazilian headquarters.
The second is the strong growth in investments in tractors and other agricultural machinery, and in trucks and buses, both highly influenced by international commodity prices.
“It doesn’t mean that investments are booming,” says Ibre/FGV National Accounts Center coordinator Claudio Considera. “Investments are recovering recent losses more, helped by a very low comparison base.”