By: Staff Writer
August 6, 2024
The Economic Commission for Latin America and the Caribbean (ECLAC) in a recent report said that foreign direct investment (FDI) is lower by 9.9 percent for 2023 over 2022, but still above the decade average.
The report, “Foreign Direct Investment in Latin America and the Caribbean, 2024,” said: “In 2023, US$ 184.304 billion in FDI entered LAC, a figure that was 9.9 percent lower than in 2022 but still above the average of the past decade. With this decline, FDI inflows as a share of the region’s GDP also fell, representing 2.8 percent in 2023. Despite this, inflows represented 14 percent of the world total in 2023, a higher share than the average for the 2010s (11 percent).
The report added: “Inflows to Central America and the Caribbean also increased compared with 2022 (12 percent and 28 percent, respectively). This was the case in almost all the countries of Central America, in particular Costa Rica (28 percent and Honduras (33 percent), while in the Caribbean it was largely attributable to rising inflows to Guyana (64 percent) and the Dominican Republic (7 percent).”
The report also said: “The outlook for future investment in the LAC improved in 2023, as reflected in an increase in the value of new investment project announcements (16 percent) to US$ 115 billion, compared to US$ 99 billion in 2022.
“Despite the growth in the amounts announced, the number of announcements decreased by 7 percent. The growth in total value, together with the decrease in the number of announcements for the region, was owed to the increased number of megaproject announcements, especially in the renewable energy, coal, oil and gas, metals and minerals, and automotive and auto parts sectors.”
With regard to Central America, “Costa Rica received a record US$ 4.687 billion of inward FDI in 2023, a rise of 28 percent on the previous year. All components of FDI increased during the period. Reinvested earnings, the component with the largest share (73 percent), climbed 33 percent compared with 2022; equity inflows also increased by 17 percent, which accounted for 16 percent of the total. The weakest growth was in intercompany loans, which rose by 14 percent and had a 10 percent share of total FDI inflows into the country.
But for the Caribbean, “Guyana has attracted large FDI inflows since 2017, when resources related to the discovery of the Stabroek oil block started flowing into the country. In 2023, there were inflows of US$ 7.198 billion, a 64 percent increase over 2022, positioning Guyana as the sixth-largest inward FDI recipient country in Latin America and the Caribbean that year.