Domestic direct investment in Brazil has had best February since 1995

RIO DE JANEIRO, BRAZIL – Brazilian entrepreneurs believe in the future of their country as never before in this century.

Domestic direct investment (DDI) recorded its best performance in 27 years in February. 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.

According to the central bank, direct investment was attracted by the net inflow of US$12.2 billion in equity. Intragroup transactions saw an outflow of US$394 million.

Unlike foreign investment on the B3, direct investment in Brazil is focused on long-term gains. These include investments in business areas such as companies, the opening of multinational branches, and infrastructure works. In the accumulated 12 months, IDP totaled US$50.7 billion, or 3.09% of GDP.

Direct investment in Brazil (DDI) offset transaction deficits in February and the first 12 months of the year, according to the Central Bank.

Inflows to the country totaled US$11.8 billion in February, the highest monthly figure since January 2017, which is also the highest for February in the historical series that began in 1995.

FOREIGN TRADE ON TRACK

The Brazilian Central Bank (BC) announced Friday (29) that Brazil’s foreign trade balance showed a deficit of US$2.4 billion in February.

The Monetary Authority delayed the release of the report by over a month due to the strike by officials.

Current transactions in the external sector are composed of the trade balance, services purchased by Brazilians abroad, and income such as remittances of interest, profits, and dividends from Brazil to other countries.

According to the Central Bank, the deficit decreased by 40% compared to February of last year, when the balance was US$4 billion.

The positive result was due to the performance of Brazil’s trade balance, which showed a surplus of US$3.5 billion in February 2022. In the same month last year, a deficit of US$357 million was recorded.

In February this year, exports totaled US$23.7 billion, while imports reached US$20.2 billion.

The services balance showed a deficit of US$1.8 billion in February 2022. The negative balance increased by 25.5% compared to the same month last year.

Current transactions showed a deficit of US$26.1 billion in the twelve-month period ending in February. This figure is equivalent to 1.59% of GDP.