Brazilian FDI Remains Challenging in Near-Term

NKF Senior Managing Director, Gregg Wassmansdorf, recently authored his fifth of six annual editorials for fDi Magazine. In this article, Mr. Wassmansdorf shares his perspective on Brazil, a country that, for all its strengths as Latin America’s leading economy, must contend with government corruption, political instability, and a plummeting currency if it ever hopes to regain investor confidence.  

Excerpt below.

“It is difficult to be optimistic about Brazil’s near-term economic prospects. The largest economy in Latin America by a wide margin, the country struggles to fulfil hopes it could be a reliable and powerful engine of growth, domestically or regionally. Expectations of growing FDI should also be tempered as its challenges are deeply rooted and social, economic and political in nature.

Brazil made substantial progress during the 2000s advancing its economy and improving social conditions with rising education levels and incomes. This positive momentum was also indicated by inbound investment figures. Brazil achieved its largest average FDI project size in 2008 for both capital investment and jobs created, and experienced its largest annual number of FDI projects (524) in 2011, according to fDi Markets.

Since then, however, FDI has been in freefall. The number of companies making investments and the number of investment projects announced annually have both dropped by roughly two-thirds over the past six years, across virtually every sector.”

Read the full article, View from the Americas: Brazil’s long road to fulfilling its potential.

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