Brazil marks major rise in FDI

Brazil attracted $22.8bn of inbound greenfield investment in the 12 months to June 2019, which marks an 83.6% increase compared with the same period a year earlier, according to greenfield investment monitor fDi Markets. In the same 12-month period to June 2019, Latin America’s largest economy brought in 308 greenfield projects, up from 228 in the same period the previous year.

Several sectors increased greenfield investment activity in both project numbers and capital expenditure, including automotive OEM – which was counter to the global decline in both projects and capital expenditure during this period – as well as the communications, and software and IT services sectors. Most notably there was a $5.18bn collective increase in greenfield investment into the coal, oil and gas, and metals sectors.

This increased greenfield investment activity could be partly attributable to Brazilian president Jair Bolsonaro, who took office on January 1, 2019, and has been pursuing an agenda of privatisation and deregulation. With a long-planned pension reform bill, approved in July 2019 and seen as a way to improve Brazil’s fiscal sustainability, and expected tax reforms in coming months, foreign investors appear to be signalling increased optimism in the country.