Foreign investment in Brazil accounted for 46.6% of GDP last year
Brazil closed out 2024 with a stock of USD 1.141 trillion in foreign direct investment in the country, representing almost half (46.6%) of its GDP – a record in the Central Bank’s time series. The data were released by the Central Bank on Friday (Sep. 26).
In 1995, when the series began, foreign direct investment accounted for 6.1 percent of the GDP. In 2000 it rose to 17.1 percent, reaching 25.2 percent in 2010. In 2019, it surpassed the 30-percent mark for the first time (34.6%). In 2023, it stood at 45 percent.
Fernando Rocha, the Central Bank’s head of statistics, pointed out that most companies that receive foreign capital are controlled by these investors, adding that investors have 100 percent of the capital or control the company or more than 50 percent of the capital.
Increased production capacity
The Central Bank divides the USD 1.1 trillion into two parts – USD 884.8 billion is equity participation in companies, i.e. partners, while USD 256.4 billion is intercompany operations, i.e. loans between companies.
“The most important thing is the typically productive nature of this direct investment, increasing installed capacity in the country and contributing to productivity growth,” Rocha said.
Despite the record against the GDP, Rocha noted that, in absolute terms, the stock of direct investment in the country was higher at the end of 2023, when it reached USD 1.3 trillion.
The head of the Central Bank’s statistics department argued this is due to the exchange rate.
“These investments in Brazil are all made in reais, so we calculate these values, but then convert them into dollars,” he remarked.
According to Rocha, from the end of 2023 to the end of 2024, the exchange rate went from BRL 4.84 per dollar to BRL 6.19. “This currency depreciation reduced the value of direct investment when expressed in dollars,” he pointed out.
Fernando Rocha further mentioned that the main countries investing directly in Brazil are the US first, followed by France, Uruguay, Spain, and the Netherlands.
“Our main sectors, which account for 40 percent of investment, are financial services, commerce, electricity, and oil extraction,” he listed.
