International direct investments whole US$ 82.3 billion till November, the very best worth in 10 years
Information was disclosed this Wednesday by the Central Bank. At the same time, the gap in the external accounts rose to US$ 44.6 billion in the first 11 months of 2022.
Direct foreign investment in the Brazilian economy totaled US$ 82.3 billion from January to November this year, the Central Bank informed this Wednesday (21).
This is the highest level for this period since 2012 (US$ 87.5 billion). In 2021, the inflow of direct investments, until November, totaled US$ 51.6 billion. The BC historical series for this indicator begins in 1995.
In November alone, foreign direct investments totaled US$ 8.3 billion, against US$ 5 billion in the same year of 2021.
The entry of foreign investments shows that foreigners are making productive investments in the country, which demonstrates confidence in the Brazilian economy.
Despite the slowdown, the Gross Domestic Product (GDP) still displays positive numbers while the rest of the world fears a recession (with the rise in interest rates to combat inflation and the energy crisis in Europe, a consequence of the war in Ukraine).
- In twelve months, foreign investments totaled US$ 77.1 billion up to November this year, against US$ 73.8 billion in the previous month (October).
- In the whole of last year, foreign investment in the country totaled US$ 46.44 billion. The BC forecast, already outdated, was that, in 2022, they would reach US$ 80 billion.
Still according to the BC, the country’s external accounts registered a deficit of US$ 44.6 billion in the first eleven months of the year, with an increase of 15.5% in comparison with the same period of last year (-US$ 38 .6 billion).
The result in current transactions, one of the main indicators of the country’s external sector, is formed by the trade balance (trade in products between Brazil and other countries), services (acquired by Brazilians abroad) and income (remittances of interest, profits and dividends from Brazil abroad).
Despite the increase in the deficit in the external accounts, direct foreign investment in the economy was sufficient to “finance” the negative result.
According to the BC, the increase in the external account deficit in the partial of 2022 is mainly related to a worsening in the service account (more spending abroad, including travel) and income (increase in remittances abroad by companies) .
- In November alone, the deficit in external accounts added up to US$ 60 million, against a negative result of US$ 8.5 billion in the same month of last year.
- For the whole year of 2022, the Central Bank expects the external accounts to deteriorate. The institution estimates a deficit of US$ 60 billion. If confirmed, it will be the biggest since 2019 (-US$ 65 billion), that is, in three years.
Spending by Brazilians abroad
According to information from the Central Bank, spending by Brazilians on trips abroad totaled US$ 1.08 billion in November this year, up in comparison with the same month last year (US$ 618 million) – when the country was facing a hardest part of the Covid-19 pandemic.
In the accumulated result for the first ten months of this year, according to the Central Bank, spending by Brazilians abroad totaled US$ 11.13 billion. This represents an increase of 149% compared to the same period last year (US$ 4.46 billion).
- BC numbers show that spending by Brazilians abroad has not yet returned to pre-pandemic levels, which started in March 2020.
- Prior to Covid-19, spending was typically above $1.3 billion per month, and could top $2 billion in peak season months.
- The expenses of Brazilians abroad are influenced by some factors, such as the level of economic activity and the price of the dollar, used in international transactions.
- Tickets and hotel expenses, for example, are quoted in foreign currency. As a result, when the dollar is high, Brazilians end up spending more on these items.