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Water Crisis And Political Crisis Are The Main Factors That Should Slow Investments This Year And The Beginning Of Next Year
Many Brazilians were excited about the economic recovery after the progress of vaccination and prospects for the end of the pandemic; however, things are not going as expected. The political and water crisis is causing severe damage to investments in the country.
According to an assessment made by FGV specialists, the water crisis, along with the political crisis, should slow investments in Brazil at least until the beginning of next year.
The Investment Intention Indicator rose slightly in the third quarter of this year; however, the services sector at 110.9 points and construction at 103.6 points are below the levels recorded before the pandemic. The highest number is in the industry, with 129.2 points, but it is lower than what was recorded at the beginning of the year, 132.8.
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Brazilian city gains industrial hub for 85 companies that is equivalent to 55 football fields.
However, GDP data released this month by IBGE shows that investments in the country fell by 3.6% compared to the first quarter of this year. The investment rate recorded at 18.2% is well below the 32.9% recorded in emerging countries. It is also below the 22% of developed countries.
The Coming Months Should Be Of Low Growth
In a survey conducted by Estadão, Rodolpho Tobler, responsible for the confidence survey at FGV, expects a scenario of low growth in the coming months. The high unemployment rate, inflation, and water crisis are the main factors that justify a perspective of low economic growth economic.
With the GDP decrease in the second quarter of this year, growth prospects for the economy have fallen by about 5% for this year. However, economic growth for 2022 is expected to remain high between 1% and 2%. This situation should reduce the pace of investments in Brazil.
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