During 2018, Guatemala received $1.175 million in FDI, barely 0.5% more than the investment reported in 2017, mainly because of the political and legal uncertainty that ruled the country.
Figures from the Banco de Guatemala (Banguat) report that in the last five years, the country has gained $6,139 million in foreign direct investment (FDI), being 2014 the one that registered the highest year-on-year increase when reporting a 7% rate regarding 2013.
Businessmen in Nicaragua expect to reduce by at least 50% the investments they had previously planned for 2018, waiting for the problems affecting the country to be solved.
The research by the Consejo Superior de la Empresa Privada (Cosep) and the Fundación Nicaragüense para el Desarrollo Económico y Social (Funides), takes place in the context of more than 160 days of political and social crisis, which has severely affected the performance of the country's economy.
In the first half of the year private fixed investment increased by almost 6% compared to the same period in 2016, driven mainly by the good performance of the construction sector.
From the Central Bank's "Quarterly GDP Report II"
Private fixed investment grew by 2.8% (5.6% in the first half of the year), as a result of increases in construction (9.3%) and other investments (3.25) and a decrease in machinery and equipment (-2.2%).Fixed investment increased by 2.2% (4.6% in the first half of the year), as a result of a positive performance in machinery and equipment (15.3%) and decreases in other investments (-8.1%) and those under construction (-1.0%).
The country attracted $1,203 million last year, with highlights being an increase in capital from countries in the region such as Panama, Colombia and Guatemala.
In 2015 flows of foreign direct investment (FDI) from Latin America were higher than those received from North America, totaling $437.8 million, the largest share (36.4% of total), according to the Central Bank of Honduras.
Poverty has declined, foreign investment has quintupled in a decade, the economy has grown more than the average in Central America and Nicaraguan businessmen are applauding it.
Carlos Pellas, one of the most successful Central American businessmen with investments in sectors relating to financial insurance, agribusiness, information technology, energy, vehicle distribution, and production and beer and spirits, did not make a statement in a merely personal capacity but rather one relating to the economy of his country, Nicaragua, when he said that "people think that things are going well, there is a lot of investment, construction has grown, it is a dynamic sector, you can tell that from one look".
A sustained growth of private investment will not be enough to offset the decline in the amount of investment in public infrastructure over the next four years.
On top of the projection of less public infrastructure is an expectation of poor tax collection for the period in question, according to analysis by the firm Indesa. Company projections indicate that "...
When you look at Nicaragua without prejudice and without political bias, you can see a country which unlike before, offers good opportunities for investment.
EDITORIAL
Central America Viewed from Within
When you look at Nicaragua without prejudice and without political bias, you can see a country that offers good opportunities for investment.
And who better to do that exercise than a businessman linked to actual production.
The growth rate of investment in fixed capital and company stocks went from 12% in the third quarter of 2013 to 3% in the last quarter of 2014.
There are now five consecutive quarters of deceleration in the growth rate of investment by firms in the country, according to data presented by the Central Bank of Costa Rica.
The economist, Manuel Zúñiga, told Nacion.com that "...
Annual growth registered in the last quarter of 2014 reflected an increase of in completed construction areas, mainly industrial, commercial, residential and service works buildings.
From a report issued by the Central Bank of Nicaragua "Performance of private construction":
Overall results of activity in completed construction areas
In the fourth quarter, completed construction areas recorded 38.5% growth (- 16.1% in 2013.
Fitch Ratings has affirmed the BBB rating with stable outlook, anticipating the positive effects of the Canal expansion for the logistics sector and for overall economic performance.
From a statement issued by from Fitch Ratings:
Fitch Ratings has affirmed the foreign currency rating for Panama's long-term and local currency issuer ratings at 'BBB'.
Stagnation in private investment has been attributed to a 26.7% reduction in the number of homes completed up to March 2014 compared to the same month last year.
The decrease in investment in the sector seems to be the main reason behind the stagnation showing in construction activities in the country, one of the main drivers of the economy.
"...Official data indicates that the growth of the overall investment was 1.6% in the first quarter of 2014. However the private sector barely grew 0.5%. A total "stagnation" is recognized by the Nicaraguan Chamber of Construction (CNC) and the Nicaraguan Foundation for Economic and Social Development (Funides). "
A slowdown in the pace of economic activity in the country and loss of dynamism in private investment has been indicated.
Economic Situation of the second quarter of the year, prepared by the Nicaraguan Foundation for Economic Development:
The Nicaraguan Foundation for Economic and Social Development (FUNIDES) presents its second report on economic conditions in 2014, which states that in the first 4 months of this year, the economy experienced a mild slowdown. According to the 12-month average variation of the Monthly Index of Economic Activity (IMEA), growth which had been over 5 percent since April 2013, fell to 4.8 percent in April, largely due to the earthquakes in that month.
An article in the Financial Times notes that Managua should be considered as a strategic place to invest in.
"The intelligence division of the Financial Times this week published its ranking on the American cities of the future and found that Managua in Nicaragua, one of the poorest countries in Latin America, should be considered as a strategic place in which to invest," reported Elnuevodiario.com.
Seven bills designed to encourage investment are still pending in the legislative committees of finance, treasury, and economy.
Laprensagrafica.com reports that "The Legislative Assembly is about to close the first Legislative month of 2013 without having approved any of the reform initiatives and new laws proposed by the President, Mauricio Funes, to encourage investment.
Beyond the new laws to promote domestic and foreign investment, the government must demonstrate the existence of legal security in El Salvador.
An article in Diario El Mundo reports that "The reform package that the government recently introduced to encourage domestic and foreign investment in the country, yesterday received the backing of the business association although they say there is still a lot to be do done."