Jun 2016 Financial News

Eclac: FDI to region down by 9.1 per cent

Jun 16, 2016

SANTIAGO—Foreign direct investment (FDI) inflows in Latin America and the Caribbean declined 9.1 per cent in 2015 compared with 2014, totaling US$179.10 billion, the lowest level since 2010, the Economic Commission for Latin America and the Caribbean (Eclac) announced yesterday at its headquarters in Santiago, Chile.

This outcome is due to lower investment in sectors linked to natural resources, mainly mining and hydrocarbons, and to the deceleration of economic growth, above all in Brazil, the United Nations organisation indicates in its annual report Foreign Direct Investment in Latin America and the Caribbean 2016, released during a press conference.

For 2016, Eclac estimates that FDI will remain below the levels reached in recent years, in line with countries’ economic prospects. It could decline as much as eight per cent, although it will continue to be an important factor in the region’s economies, so it is necessary to attract quality flows, the Commission says.

“In the current configuration of the global economy, foreign direct investment is destined to play a relevant role in national and regional development processes. With proactive and integrated policies, countries can take advantage of these flows to diversify their economies, boost innovation and the incorporation of technology, and respond to the challenges of the 2030 Agenda for Sustainable Development,” said Alicia Bárcena, Eclac’s executive secretary.

The decline seen in 2015 in Latin America and the Caribbean contrasts with the dynamism observed at a global level, the document notes. Last year, global FDI flows expanded 36 per cent, reaching an estimated total of US$1.7 trillion, driven by an intense wave of transnational mergers and acquisitions focused on developed countries and the United States in particular.

Foreign direct investment in the Caribbean declined 17 per cent to $5.975 billion.

Source:
Trinidad Guardian, A21
Thursday June 16, 2016