Foreign direct investments in Brazil rise 57% through July and are the highest since 2012

In 2022, Foreign Direct investments (FDI) to Brazil showed the highest balance of resources since 2012.

Net inflows of USD 52.6 billion were recorded from January to July – a 57% increase compared to the same period in 2021.

The central bank (BC) released the results on Monday (26). Here is the full report.

Unlike the investments of foreign funds on the B3 (São Paulo Stock Exchange), direct investments in the country are focused on long-term profits.

This includes investments in business sectors such as companies, opening multinational branches, and infrastructure works.

In July alone, the balance of investments amounted to US$7.7 billion, the highest amount for that month since July 2014.

The number of FDIs increased by 16.7% compared od last year.

According to the Central Bank, net capital inflows were US$5.6 billion and US$2.1 billion for intercompany transactions.

FDI totaled US$65.6 billion in the 12 months accumulated through July.

The figure represents 3.73% of GDP (gross domestic product).

The balance was US$64.5 billion through June or 3.69% of GDP.

EXTERNAL ACCOUNTS

Brazil’s external balance showed a deficit of US$4.1 billion in July.

This was a 242% increase compared to the same month last year when outflows of US$1.2 billion were recorded.

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

The cumulative external deficit for the last 12 months was US$36.6 billion, or 2.08% of GDPItit amounted to US$33.6 billion (1.92% of GDP).

Although the external balance showed a deficit, this amount was offset by direct investment in the country in that month and over 12 months.

INTERNATIONAL RESERVES

International reserves totaled US$346.4 billion in July 2022, an increase of US$4.4 billion compared to the previous month.

The result was mainly due to variations in prices and interest that contributed to increasing the stock by US$ 3.9 billion and US$ 540 million, respectively.

With information from Poder360