Rio, May 24, 2004 (Agência Brasil) - The director of Invest Brazil, Clementino Fraga Neto, informed that the net result of foreign direct investments in April, US$ 381 million, 52% less than the US$ 796 million recorded in April, 2003, can be explained by the adverse international situation and, also, the transfer of earnings abroad by the Telefônica Company.

The director of Invest Brazil pointed out, however, that, despite the decline, Brazil retained its sixth-place position in the ranking of global investment flows. From January to April, foreign direct investments in Brazil came to US$ 3.1 billion. Invest Brazil is the country's investment promotion agency, fruit of a partnership between the federal government and the private sector.

The rise in petroleum prices and the complicated situation in the Middle East, including the crisis in Iraq, signal that the flow of foreign investments in 2004 should end the year at around US$ 13 billion, the target forecast by the Central Bank, Fraga Neto estimated.

The United States, with US$ 203 million, led the ranking of investors in April, followed by Italy, with US$ 132 million, and the Netherlands, with US$ 73 million. The sector that received the largest influx of resources in April was the energy sector, US$ 134 million.

The inflow of foreign direct investments to Brazil in May should suffer the effects of the rise in international petroleum prices, Fraga Neto said. In line with Central Bank data on currency exchange transactions concluded up to the moment, the market expects foreign direct investments in May to hit the mark of US$ 600 million.

Translator: David Silberstein