Foreign investment advances 34%
Folha de S. Paulo - 04/29/2008
Despite the uncertainty of the international market, the flow of direct foreign investment to Brazil surpasses so far the amounts registered in the beginning of 2007. According to the Central Bank, between January and March the inflow of foreign capital amounted to US$ 8.799 billion, 34% more than 2007's first quarter and is a record considering the period. According to the partial data closed yesterday, the result for this month was also positive and amounts to US$ 3.6 billion. The BC's projection for this year may be US$ 32 billion, which, if confirmed, should be a little less than 2007's, US$ 34.6 billion. In the first quarter, the financial setor was the one that most received foreign investments, which means 15.4% of the total. Metallugic companies and vehicles assemblers corresponded to respectivelly 10.3% and 7.2 % of the amount invested by multinationals in Brazil. BC's Head of the Economic Department, Altamir Lopes, points out that the sectors that have most received foreign investments are those which are suffering with the American economy's cooldown the most. The financial institutions, for example, have had billionaire losses with the crisis in the real estate sector in US. Besides, he affirms that the American crisis has also influenced the remittance of profits abroad made by multinationals installed in Brazil, which reached a record level in March. But it was not only the direct investments that continue in high levels. The financial investments, which have government-issued titles as their main destination, have also remained high, despite the recent initiative of the Ministry of Finance to stop this flow of dollars. Since March 17, foreign investors that invest in public titles - whose profitability follow the oscillations of the Selic rate (at 11.75% a year today) - started to pay a higher IOF (Tax over Financing Operations) fee. The objective was exactly to diminish the interest of those investors in government's papers, consequently reducing the inflow of dollars to Brazil. However, the figures of the BC show that the measure had little effect. During last month foreign investments in fixed income titles totaled US$ 4.276 billion, 22% more than last year's March and above last February's US$ 3.036 billion.