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Brazilian FDI Reaches Record Levels

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Foreign direct investment in Brazil has reached record levels as the country continues to attract investors in search of good opportunities — a trend set to continue for quite some time.

Ernst & Young’s latest report on Brazil predicts its economy will continue to enjoy substantial growth until at least 2016, so there is still plenty of potential for investment.

According to the report, asset managers, hedge funds and banks are all anxious to take advantage of this potential, and foreign direct investment in the country reached $64 billion during the 12 months to May this year. Experts predict this will be the best year ever for investment levels.

Last year Brazil enjoyed GDP growth of 6.9% and is currently the seventh largest economy in the world. This year GDP growth is predicted to be 4.9%, and is expected to stay at this level until 2015.

Many experts expect the Brazilian economy to overtake the UK this year. Part of the reason for this record growth is consumer spending, with an estimated 20 million Brazilians having joined the middle classes since 2006. Most of them have embarked on an incredible spending spree with their new-found wealth, buying everything from electronics to property.

The Brazilian Growth Acceleration Plan (PAC) has been responsible for much of this wealth, as millions have benefited from better transportation, infrastructure and social improvements. A major part of PAC is the social housing program, Minha Casa Minha Vida which represents the largest property investment in Brazil. This has led to considerable interest into Brazilian property funds, with both foreign and Brazilian investors keen for a piece of the pie.

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