Infrastructure Remains Attractive to Foreign Investment in Brazil, Says Minister

RIO DE JANEIRO, BRAZIL – The Minister of Infrastructure, Tarcísio de Freitas, said yesterday, May 29th, that fiscal responsibility, associated with the large number of portfolios, the soundness of Brazilian assets, and the availability of credit, pose a set of qualities that will keep the country attractive for foreign investment, even amid the crisis caused by the pandemic.

According to him, 2021 will be a year of strong economic rebound and an “even better” scenario is expected for 2022, when the basic interest rate will be low.

“The drop in GDP is not confined to Brazil. It is occurring all over the world. We will continue to pursue the planned line of fiscal responsibility and solvency. There won’t be any kind of foolishness here”, he said in a live broadcast promoted by Jota website.

During the live broadcast, Freitas reiterated that infrastructure has attracted foreign investors and that this interest is reinforced by the fact that all bid notices have been published based on many consultations, in search of the ideal format. “We do not publish any bid notices with no market results. When we do publish it is because we already have a positive position,” he said. “Investors are interested in Brazil. I say that because I have spoken to several of them”, he added.

Asked if this assessment considered the scenario pointed out by the Brazilian Central Bank – according to which investors would have withdrawn from the country some R$34 (US$6,372) billion in investments this year – Freitas said that this had occurred, but that in part it is explained by the fact that interest rates in Brazil have become cheap, and the need for companies to pay debts abroad.

“We had a first moment of money withdrawn to pay debts abroad with local currency, and we had a second outflow of investors from developing countries, those who [in world crisis situations] suffer the most,” he said.

Freitas said the withdrawal of this money was perceived also in the exchange pressure, which ultimately pushed up the value of the dollar. However, he believes the situation will improve over the longer term, with the country keeping inflation under control in a low interest rate scenario.

“We have money flight from Brazil, in a phenomenon that occurs with all developing countries. But since we have a lot of idle capacity, this exchange rate depreciation is not producing inflation. When the activities are restarted, we won’t have such high prices and we will have low interest rates,” he argued when anticipating that the country will experience “a good year in 2021, and an even better year in 2022”.

According to the Minister, crisis situations produce opportunities that must be seized. “A crisis, in a way, causes emotion, solidarity and a sense of giving. Everyone wants to help. Thus, we have a favorable environment even in the National Congress for measures to be passed”.

Freitas said that the BNDES (National Development Bank) will play an important role in responsibly providing credit lines for various sectors of the economy. According to him, this is already being achieved through guarantees and loan syndications, in order to preserve cash “so that we also have credit for infrastructure”.

Source: Agência Brasil