Brazil On The Rise: The Interplay Of Political Instability, FDI, And Resurgent Economic Growth

Similar to numerous other emerging economies, Brazil has experienced a significant increase in foreign investment during the past few years. In 2022, the global inflows of FDI amounted to US$ 1.29 trillion, reflecting a 12% decrease compared to the previous year. This decline can be attributed mostly to substantial divestments undertaken in Brazil. The objective of this study is to examine and assess the subsequent aspects of political stability on FDI and Brazil's broader economic growth. The present study used an ARDL technique to analyze the years 1996 to 2022, utilizing secondary data. The results suggest that the presence of political stability has a positive impact on foreign investment, commercial activities, and the overall economy of Brazil in the long term. The stability of policies is intricately linked to the political system of a nation and exhibits a positive correlation with both FDI and foreign portfolio investments. It is recommended that the administration abstain from implementing any arbitrary modifications presently in order to retain policy coherence.