Brazil’s investment ratio in 2022 is expected to be lower than that of 82% of countries -FGV

RIO DE JANEIRO, BRAZIL – The investment ratio in Brazil has been at a low level for years and is expected to be lower than in 82% of countries in 2022. According to a study by the Brazilian Economic Institute of the Getulio Vargas Foundation (Ibre/FGV), this is made exclusively available to g1.

The study by researcher Juliana Trece shows that 139 countries out of a total of 170 are expected to have a higher level of investment relative to GDP (gross domestic product) than Brazil this year – a deterioration compared to 2021, when 132 countries, or 77%, fared better than Brazil.

The study is based on the International Monetary Fund’s (IMF) latest forecasts for the global economy and the FGV-GDP Monitor’s first-quarter estimates.

The investment rate calculates everything invested in machinery, durable goods, expansion of production capacity, building and civil engineering, infrastructure, and research and development.

The progress of this component of GDP is considered fundamental to creating new businesses, creating more jobs, and, consequently, greater potential growth of an economy.

Brazil is forecast to have an investment rate of 18.4% of GDP in 2022, compared to 19.2% in 2021, which, if confirmed, would be the first decline after five years of recovery.

The average investment rate for the year is estimated at 27.3% for the list of 170 countries, which would improve last year’s figure of 26.7%.

China is forecast to have a rate of 42.5% of GDP this year. Among the countries topping the investment rankings, other emerging markets stand out, such as Korea (33.5%), India (32.11%), and Turkey (31.7%).

In South America, the ratio is expected to reach 26.7% of GDP in Chile and 25.1% in Peru. Even Argentina, which has been struggling with a severe economic crisis for years, has a higher rate than Brazil, with an expected rate of 19.6% of GDP.

DOMESTIC DIRECT INVESTMENT IN BRAZIL HAD THE BEST FEBRUARY SINCE 1995

On the other hand, Brazilian entrepreneurs seem to believe in the future of their country as never before in this century.

In February, domestic direct investment (DDI) recorded its best performance in 27 years. Net inflows into the country totaled US$11.8 billion, the highest for the month in the historical series that began in 1995. The figures are from the central bank.

Inflows were up 34.1% from the same period last year when they totaled US$8.8 billion. It was also the highest monthly value since January 2017.

The value of February’s DDI was enough to offset the US$2.4 billion deficit in February’s external balance.

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