Between 2016 and 2021, the share of investments in the economy in relation to the Gross Domestic Product (GDP ) grew from 15.52% to 19.17%, and, according to a study by the Center for Capital Market Studies (Cemec), this expansion was due to the increase in investments by the private sector.
According to the study, the 2021 result reflected a cycle of resumption of investments after the economic crisis between 2015 and 2016, but which gained strength mainly from 2019 to 2021, even with the effects of the pandemic . The last three years are responsible for 2/3 of the result for the period.
In these years, the average investment growth rate was 8% per year, almost double the average between 2016 and 2021, of 4.5%.
According to Cemec’s calculations, the investment/GDP ratio could have been even higher had public sector investments not declined in the period, falling from 1.93% to 1.64%.
As a result, the positive result was attributed entirely to the private sector, with investments in relation to GDP rising from 13.59% in 2016 to 17.53% in 2021.
According to Cemec, the result is “surprising” due to the “existence of idle capacity, falling expectations for growth in the coming years and high levels of uncertainty”.
Also according to the study, the expansion in private investment was mainly linked to two sectors, the construction and capital goods industry for agriculture .
From 2016 to 2021, the annual production rates of the two sectors showed growth, but the expansion was even greater, almost double, considering only the period from 2019 to 2021.
For the institute, the positive performances have different causes. In the case of the construction industry, the expansion is linked to higher spending by families on renovations and maintenance during the pandemic and the fall in interest rate reducing the costs of financing and selling properties.
In relation to the capital goods industry for agriculture, the result would be linked to the strong performance of agriculture and livestock and investment incentives to increase production amid the high prices of commodities and a favorable exchange rate for exports, with the dollar valued.
Source: CNN Brasil
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