RIO DE JANEIRO, BRAZIL – Driven by the commodities boom, Brazil ended 2021 as the sixth-largest destination for foreign investment, regaining its position from 2019. Data released Thursday by the U.N. Conference on Trade and Development (UNCTAD) showed that Brazil received US$50 billion in capital inflows last year, compared with US$28 billion in 2020.
The volume put the national economy above all European countries and moved it from 9th place in the list of preferred destinations for investment in 2020 to 6th.
In 2022, the United Nations warns that investment in the world will decline, and the global crisis will likely hit emerging economies harder. The break has already been felt in the first three months of the year, with a 21% decline.
However, in the case of Brazil, it is believed that maintaining high commodity prices will encourage multinationals to increase their investments in the country by the end of 2022.
According to James Zhan, director of UNCTAD’s investment division, Brazil has been a traditional destination for foreign investment flows for years. But after a sharp drop in 2020, the recovery is still ongoing.
The betting for 2022 is that the flow can finally return to 2019 levels, which were US$65 billion. “Commodity prices may encourage multinational companies to expand their activities in extractive industries or agriculture,” the representative said. According to him, Brazil “may see a continuation of the increase in investment for a full recovery.
In 2021, countries such as Canada and Singapore were ahead of Brazil, with investments of US$60 billion and US$99 billion, respectively.
The ranking is topped by the U.S., which will receive US$367 billion in 2021, followed by US$191 billion for China.
The list of top ten destinations is completed by India, Russia, South Africa, and Mexico.
According to the U.N. agency, foreign investment in South America increased by 74%, reaching US$88 billion. The main reason for this is the interest of multinational companies in the raw materials and minerals sector.
According to the U.N., the value of new projects announced and the number of international project financings in the country increased by 35% and 32%, respectively.
One of the most significant projects was Bravo Motor’s (United States) US$4.4 billion project to manufacture electric vehicles, batteries, and components in Brazil. Among international project financings, the largest was constructing a 2-GW offshore wind farm for US$5.9 billion sponsored by Ocean Winds (Spain).
Brazil also rose in the ranking of countries investing abroad. In 2021, domestic companies invested US$23 billion overseas, putting the country in 16th place. In 2020, US$13 billion in funds were withdrawn from abroad, dropping Brazil to 163rd place.