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Foreign Investment in Brazil Hits Record $34.6 Billion

Double the amount of 2006

Nearly double that recorded in 2006, direct foreign investment in Brazil hit a record $34.6 billion last year, the Central Bank said Jan. 28. The institution gave a conservative forecast that such investment could fall back this year to $28 billion, though the inflow was still going strong with four billion dollars recorded so far, the bank's economic director, Altamir Lopes, said.

In 2006, direct foreign investment amounted to $18.8 billion.

Brazil's position as one of the most attractive emerging economies was also seen in stocks and long-term bonds. A record total $39.8 billion were injected into those markets in 2007, up from $14.7 billion in 2006.

"With the volatility right now, we are seeing (from January figures) continued inflows more fundamental to the confidence in the Brazilian economy" -- the direct foreign investment -- "and an outflow of capital from short-term placements and shares because of share market behavior all around the world," Lopes said.

Brazil's current account -- the sum of current transactions including goods and services between countries -- ended 2007 $3.6 billion in the black. That was less than the $13.6 billion recorded in 2006 and reflected a diminishing trade surplus due in part to the soaring value of Brazil's money, the real.

The country's balance of payments, which includes the current account, capital account (with the direct foreign investment), financial account and reserves, finished 2007 with a positive balance of $87.5 billion. In 2006 it was $30.6 billion.

External debt, both public and private, was an estimated $197.7 billion in December.

International currency reserves ended the year at a historic high of $180.3 billion.

Copyright Agence France-Presse, 2008

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