Foreign investments fall 20% between August and September

23/10/2003 - 20h48

Rio, October 24, 2003 (Agência Brasil - ABr) - The entry of Foreign Direct Investments (FDI) in Brazil fell around 20% between August and September, from US$ 1 billion to US$ 796 million.

This is the finding of Invest Brazil - the Brazilian Investment Network - which released on Thursday (23), in Rio, its analysis of FDI for September of this year.

In the assessment of the director of the organization, Clementino Fraga Neto, this decline is still directly linked to the "stagnation and crisis in the major economies of the world (United States, Japan, Canada, and the European countries), with the resulting deceleration in the pace of growth in the developed countries. Together with the retraction of the American economy, as well as the continuing repercussions of the war against Iraq, these factors, according to Invest Brazil, caused a genuine "world risk-aversion crisis."

The figures announced by Invest Brazil, based on data released by the Central Bank, indicate that Foreign Direct Investments in Brazil through September, 2003, amounted to US$ 6.46 billion (40% less than last year's volume over the same period) and should reach US$ 7.26 billion in October, consistent with the Central Bank's forecast of US$ 10.0 billion by year's end. The projection for 2004 is for US$ 13.5 billion to enter the country in the form of FDI.

With respect to the 49% decline in investments this September, compared with September, 2002, Invest Brazil underlined the correction made by the head of the Economic Department of the Central Bank, Altamir Lopez, who pointed out that the value of Gross Investment Inflows attained US$ 1.683 billion, "the best result this year." What stands out in this increase in Gross Inflows is the participation of Japan, responsible for US$ 986 million in resources entering last month and appearing for the first time among the 10 principal investors: an increase of over 1,000% compared with September, 2002. "The two increases can be explained by the sale of shares of the Rio Doce Valley Company to the Japanese firm, Mitsui." (DAS)