Foreign Direct investment fell to 9.1% in Latin America in 2015



Contrary to the results of the global average, foreign direct investment fell to 9.1% in Latin America in 2015. In Colombia, this decreased by 26% in the previous year, according to figures released by the ECLAC.


Inflows of foreign direct investment (FDI) in Latin America and the Caribbean decreased 9.1% in 2015 compared to 2014, reaching 179,100 billion dollars the lowest level since 2010, the Economic Commission for Latin America and the Caribbean reported (ECLAC).


According to ECLAC, for 2016 it is projected that the FDI will remain at lower levels than those shown in recent years, according to the economic outlook.


It could decrease up to 8%, although it will remain an important factor in the economies of the region, making it urgent to attract quality flows, the Commission said.


The result recorded in 2015, is explained by the drop in investment in sectors related to natural resources, mainly mining and hydrocarbons, and the slowdown in economic growth, especially in Brazil, says the agency of the United Nations in its annual report 'Foreign Direct Investment in Latin America and the Caribbean 2016'.


In 2015 the United States again ranks as the leading investor in Latin America (with 25.9% of FDI), followed by the Netherlands (15.9%) and Spain (11.8%).
In contrast, global FDI flows increased 36%, totaling US $ 1.73 billion, being the highest setting in 9 years.


Most of the growth is explained by a wave of mergers and border acquisitions focused on developed countries, mainly in the United States.


FDI inflows into developed countries increased by 90% in 2015, while those directed at developing countries rose by only 5.3%.


As for medium and long term trends, the study highlights important changes in the announced projects between 2005 and 2015: decreases the relevance of the extractive sectors, particularly dynamic in the automotive sector is observed and increases the importance of telecommunications, renewable energy and retail.


As for medium and long term trends, the study highlights Important Changes in the Announced Projects Between 2005 and 2015: decreases the relevance of the Extractive Sectors, particular dynamic in the automotive industry is Observed and Increases the Importance of telecommunications, renewable energy and retail.


The Executive Secretary of ECLAC, stressed that investments in renewable energy and other environmental projects are the basis of the proposal of ECLAC to promote the development of the region with a great environmental boost to move towards a production pattern, energy and low carbon consumption.


Outflows of foreign investment

FDI outflows from countries in the region decreased significantly to US $ 47,362 million, 15% less than the previous year, reflecting the moderation of the expansion that had initiated the so-called trans-Latin’s companies between 2007 and 2012.

According to the report, since 2012 the flow of direct investment abroad began to decline, affected by the cooling of regional growth and changes in international markets for raw materials, a sector in which operated some of the largest trans-Latins companies.

"In 2015 the decline in prices of natural resources accentuated and the economic conditions worsened in this countries. Direct investment abroad from Brazilian companies fell more sharply than their peers in other countries in the region, "said the Cepal.


FDI in Colombia

In Colombia the FDI decreased by 26% in 2015 and stood at US $ 12,108 million, the lowest level in five years. However, ECLAC announced that the Colombian companies have shown conviction to expand its operations outside the country.



Colombian investment abroad increased by 8% in 2015 and reached US $ 4,218 million. Among the large investments abroad buying Chilean water utility Aguas de Antofagasta by Empresas Publicas de Medellin (EPM) is highlighted for US $ 967 million.
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Milan Tomic

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