FDI in LatAm Rises More than 13% in 2018: ECLAC

Foreign direct investment (FDI) in Latin America and the Caribbean increased by 13.2% in 2018, with Brazil and Mexico receiving US$88.319 billion and US$36.871 billion respectively.

Honduras and Panama also performed commendably, although inflows decreased in Nicaragua and Costa Rica, according to data released by the Economic Commission for Latin America and the Caribbean.

Largely due to political uncertainty, Nicaragua found a record 53% decline in FDI during the year, while Costa Rica suffered a decline of 3.2%.

Of the 31 countries assessed, 16 countries found the inflows increased, while 15 other countries saw them decline. Much of the inflows came in the form of intercompany loans and, to a lesser extent, reinvestment of earnings, the report noted.

Brazil and Mexico alone accounted for nearly 60% of FDI received by the region. They were followed by Argentina (US$11.873 billion, a 3.1% increase from 2017), Colombia (US$11.352 billion, an 18% decline), Panama (US$6.578 billion, a 36.3% increase) and Peru ($6.488 billion, a 5.4% decline).

FDI in Central America grew by 9.4% compared with 2017 due to the impetus of Panama. In the Caribbean, inflows shrank by 11.4% due to lower investment in the Dominican Republic (US$2.535 billion, a 29% decrease), which is the main receiver in that subregion.

The manufacturing industry accounted for 47% of funds came into the region, while services and natural resources received the remaining 35% and 17% respectively.

Much of the foreign inflows received by the Southern Cone countries originated in Europe, while US investors appeared to have focused on Mexico and a few Central American countries.