Nearshore Americas

ECLAC: FDI Rises Eight Percent in LatAm During Last Six Months

Caribbean and Latin American countries received $94.331 billion in FDI in the first six months of 2012, an increase of eight percent compared with the same period a year before.

During the same period, investment by Latin American enterprises abroad surged by 129 percent, according to the latest figures released by the Economic Commission for Latin America and the Caribbean (ECLAC).

The Commission has attributed the rise in FDI income to political stability and high commodity prices, which continue to encourage investment in mining and hydrocarbons (particularly in South America).

“The general overview of FDI inflows to the region is uneven to some extent, with falls registered in several countries. However, the strong climb in investment in Chile, Argentina, Dominican Republic, Peru and Colombia give an overall positive result,” the Commission stated in a news release.

Brazil has turned out to be largest receiver of FDI, accounting for 46% of the FDI received by the region in 2012.

Chile is also consolidating its position as a major recipient of FDI: in the first half of the year it was the second largest recipient in the region.

Mexico received 19 percent less FDI than in the previous year. “This trend will be reversed in the second half of the year, with the inclusion of the 20.1 billion dollars that the Belgian brewery AmBev paid for the Grupo Modelo,” the Commission said.

In the first half of the year, the same company bought the Dominican Republic’s main brewery- Cervecería Nacional Dominicana (CDN)- for 1.0 billion dollars. This transaction explains the surge in investment in the Dominican Republic, which is the Caribbean’s main recipient of FDI.

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In Central America, Panama and Costa Rica received similar flows to last year. Guatemala posted an increase of 47%, while El Salvador and Nicaragua saw inflows fall by 60% and 20%, respectively.

The investment outflow, according to ECLAC, was mainly due to Mexican and Chilean enterprises, which in the first six months invested 11.499 and 10.239 billion dollars abroad, respectively.

Staff Report

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