Brazilian FDI in Portugal grows to €5.3Bn

Foreign Direct Investment (FDI) from Brazil to Portugal increased to €5.3Bn between January and September, 2023 compared to the same period in 2022 according to statistics released by the Bank of Portugal.

According to the BoP data made available from the Portuguese overseas investment and trade bureau AICEP, the value of FDI grew 10% on the same period in 2022 – €4.8Bn. Of the €5.3Bn invested by Brazilians in Portugal in that period of 2023, 74.9% came directly from Brazil, but 21.1% came from Brazilian companies in Spain, according to the same data.
In the opposite direction, for the same period of 2023, Portugal invested €2.7Bn in Brazil, 11.8% less than the same period the previous year. In 2022 Portuguese FDI in Brazil stood at €3Bn.
This means that Portugal has divested in Brazil while Brazil has stepped up investment in Portugal, resulting in a negative balance of payments for Brazil.
In the first nine months of 2022, for example, Portugal divested €4.2Bn in Brazil and in the same period in 2023 that divestment rose to €4.3Bn. A little more than a year after Lula da Silva took power in Brazil, which was supposed to reset and deepen the political and economic ties between the two countries, Portugal’s direct investment in the Brazilian market is still negative. In 2023, to September, it was negative by €1.5Bn.
AICEP representative in Brazil, Francisco Saião Costa said that the growing desire for Brazilian investors to internationalise in recent years was down to the “economic and political situation in Brazil” and the desire for investors to protect their assets and diversify their portfolios by having a presence in other markets to “avoid exposure to different economic cycles”.
He also said that Portugal was a “natural choice” and a “test market” for internationalisation, I being increasingly sought after by Brazilian entrepreneurs, particularly to Europe, reflected by a growth of investment in Portugal.

Image: São Paulo – Unsplash – Odinei Ramone.