Foreigners Increase Participation in Investments Made in Brazil

06/08/2017 - 11h35

If uncertainty regarding the Brazilian economy has put on hold all types of productive investment, most doubts about the right moment to resume investments are certainly in local investors' minds.

Although the economy's investment rate has been falling for the past three years, with a cumulative retraction of 30% since 2013, foreign investment has gained participation in this area for at least two years.

A survey by the Brazilian Society for the Study of Transnational Companies and Globalization (Sobeet) ordered by Folha shows that the share of added foreign investment in the Brazilian economy reached 18.6% at the end of this year's first quarter - the highest since December 2002.

Specialists say that the domestic market's huge size, long-term perspective, the favorable currency exchange rate, which reduces costs in dollar, and the distance from local problems are attractive advantages that explain the resilience of foreign investment.

Luís Afonso Lima, the managing director of Sobeet, also stresses that foreigners do not face the restrictions of bank credit and capital market that Brazilian companies have to deal with.

Another point in favor of foreign investors is that they concentrate their projects in expansion, while most Brazilian investments have been in new ventures, and thus turbulences have become a key factor when making decisions.

	Eduardo Knapp/Folhapress
	Sobeet says that 60.3% of foreign investments in Brazil since 2015 have been directed to expansion (not including acquisitions), while only 24% targeted new ventures

Translated by THOMAS MUELLO

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