FDI down in Central America and Caribbean

The manufacturing sector as a whole saw a decline in FDI due to a sharp drop in flows to Central America and the Caribbean.

Friday, September 18, 2009

In Central America and the Caribbean (other than financial centres), the decline in FDI inflows was largely due to a 20% fall in flows to Mexico, which mainly resulted from a halving of inflows to the manufacturing sector (CNIE, 2009). Although Mexico remained the subregion’s main recipient in 2008, its share in the subregion’s total inflows decreased from 76% in 2007 to 65%, suggesting that FDI growth was uneven among the countries of this subregion. Indeed, FDI inflows soared from $830 million to $3 billion in Trinidad and Tobago, which became the subregion’s second largest recipient country due to the $2.2 billion acquisition of RBTT Financial by Royal Bank of Canada. Inflows increased by 83% to $2.9 billion in the Dominican Republic, despite a strong decline in the traditional sectors such as tourism, free zones and real estate, suggesting that the Dominican Republic- Central America Free Trade Agreement (DR-CAFTA) might have opened new investment opportunities for foreign firms. In Costa Rica, FDI increased by 7%, to $2 billion. It was driven by strong growth in agriculture, which compensated for declining FDI in all the other activities.67 Increases were also registered in Belize, Cuba, Guatemala, Honduras and Nicaragua – although from low levels – while El Salvador, Haiti and Jamaica registered declining inflows.

See full document: World Investment Report 2009 (PDF - 6.5 Mb)

More on this topic

Foreign Investment Figures in Central America

August 2017

In 2016 44% of foreign direct investment in the region was concentrated in Panama, and a fourth consecutive year of increases was recorded, with 16%, while Costa Rica received 27% and increased by only 1.1%.

From chapter I of the report "Flows of FDI in Latin America and the Caribbean", by the ECLAC:

Foreign Direct Investment in Central America

June 2016

With 43% of the total, in 2015 Panama continued to be the largest recipient of FDI in the subregion, followed by Costa Rica (26%), Honduras (10%) and Guatemala (10%).

From the chapter Central America in the report on Foreign Direct Investment in Latin America and the Caribbean:

Distribution of FDI in Central America

May 2014

In 2013 El Salvador attracted $140 million in foreign direct investment, Nicaragua $849 million, Honduras $1.060 billion, Guatemala $1.308 billion, Costa Rica $2.682 billion, and Panama $4 billion.

The Central America countries in total attracted $10.039,4 billion in foreign direct investment (FDI) in 2013, of which 40% went to Panama and only 1.6% went to El Salvador.

Foreign Direct Investment in Central America

October 2011

In the first six months of 2011, Panama received $1,426 million, 17% more than in the first half of 2010. Costa Rica received $1.057 million (+45%), Honduras $486 million (+15%), Guatemala $485 million (+54%), El Salvador $376 million (+1404%), and Nicaragua $284 million (+30%).

A report by the Economic Commission for Latin America and the Caribbean (ECLAC), confirms the upward trend in foreign direct investment (FDI) which has been recorded since 2010, for all of Latin America and the Caribbean.

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