Nearshore Americas
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FDI Inflow in Latin America Set to Decline 50% in 2020: ECLAC

Latin America is on course to see around a 50% drop in foreign direct investment (FDI) this year, but the rising investment in developing medical devices and renewable energy projects will likely help some countries to get new cash in 2021.

The region received US$160 billion in FDI in 2019, a 7.8% decrease from the previous year, according to a study by the United Nations regional agency, ECLAC.

Brazil, Latin America’s largest economy, received 43% of this total amount, while Mexico and Colombia accounted for 18% and 9% respectively.

In Central America, foreign money inflows grew in Panama and Guatemala. Interestingly, the report has praised Costa Rica for developing an admirable medical device exporting market.

Today, Europe has overtaken the United States to become the most important investor in the region. Many European multinationals are trying to develop renewable energy by capitalizing on the region’s tropical climate.

However, Latin America saw a 75% increase in FDI outflows in 2019. That is largely because many regional multinationals are investing outside the continent.

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In the Caribbean, the FDI going to the Dominican Republic overcame the decline from the year before; Trinidad and Tobago had positive levels of investment after three years of negative growth; and in Guyana, as in 2018, there was a very significant year-on-year increase.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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