Direct investment in Brazil won’t return to pre-pandemic levels this year

fdi pandemic drop
Photo: Rafapress/Shutterstock

Foreign direct investment (FDI) in Brazil is not expected to return to pre-pandemic levels in 2021, instead being predicted to mirror 2008 performance when a total of only USD 50.7 billion was brought into the country. 

Brazil’s Central Bank estimates inflows of USD 60 billion in 2021 from direct investment, down from USD 69.1 billion in 2019. However, according to the bank’s weekly Focus Report, the median of market projections for this year does not exceed USD 50 billion. 

Other market analysts have set their forecasts even lower. Brokerage firms Austin Investimentos and XP Investimentos are predicting just USD 48 billion and USD 45 billion respectively for FDI. 
Direct investment is essential for a country’s economic growth, but fiscal and political uncertainties, rising interest rates, and inflation — all of which can be seen in Brazil — tend to scare investors off.