Central Bank of Brazil discloses reduction of international investments in Brazil and contradicts Bolsonaro

Central Bank data show a different reality from that presented on Tuesday (22) by President Bolsonaro at the UN General Assembly. From January to June 2020, foreign direct investments in Brazil fell by more than 26% compared to the same period in 2019.

The Central Bank released figures on Wednesday (24) showing a drop in foreign investment in Brazil. The opposite of what President Bolsonaro said on Tuesday (22) at the UN General Assembly.

The data released on Wednesday by the Central Bank show that, from January to June 2020, foreign direct investments in Brazil fell by more than 26% compared to the same period in 2019. This money is that which enters the country and remains in the long term increasing the production capacity of companies through mergers, purchases and construction of new facilities. It was less than $ 23 billion in 2020, compared to more than $ 31 billion in 2019, the lowest figure for the period in the past 11 years.

According to the Central Bank, the fall was even greater in the period from January to August: 41% compared to 2019.

On Tuesday, in the opening speech of the UN Assembly, President Jair Bolsonaro presented a very different scenario. For leaders from around the world, Bolsonaro said that direct investments in Brazil increased in 2020.

"In 2019, Brazil was the fourth largest destination for direct investments worldwide and, in the first half of 2020, despite the pandemic, we saw an increase in investment inflows compared to the same period last year," he said. Bolsonaro.

The head of the Central Bank's Statistics Department, Fernando Rocha, said that the expectation is that investments should return to Brazil in greater volume when the most drastic effects of the pandemic on the world economy pass.

“What we are experiencing today is an international situation, one can say, unprecedented, of great magnitude. And it affects differently the components of the country's balance of payments, including direct investment. Most likely, when the situation is at the lowest level of uncertainty, they will return to the level closest to the previous ones ", evaluated Rocha.

According to analysts, in addition to the pandemic, Brazil has other challenges to attract foreign investors again. They cite, for example, the increase in public debt in recent years and the postponement of reforms such as tax. Another important point, according to economists, is the growing international distrust of the Brazilian government's commitment to combating fires and deforestation.

“This worries us because Brazil already has so many internal difficulties, we have lost space in foreign investment and we have added another factor of concern. I mean, this Brazil that grows little, that the business environment is so difficult, that the workforce is poorly qualified. We are also adding this environmental issue ”, explains economist Zeina Latif.

The Planalto Palace declined to comment on the contradiction between the president's speech to the UN and the Central Bank's data.

source: https://g1.globo.com/jornal-nacional/noticia/2020/09/23/bc-divulga-reducao-dos-investimentos-internacionais-no-brasil-e-contradiz-bolsonaro.ghtml