El Salvador: Foreign Investment Rebounds

After the first semester of 2018 reported a 29% year-on-year fall in the flow of Foreign Direct Investment, in the period from January to June 2019 the increase was 52%.

Friday, October 4, 2019

During the first semester of 2019, El Salvador received $435.9 million in net Foreign Direct Investment (FDI), which allowed it to surpass by far the historical average of the last ten years, informed the Central Reserve Bank.

The report explains that "... This result was thanks to net investments in the Information and Communications, Electricity (mainly in non-conventional energy) and Industry sectors. These resources were allocated through increases in capital and debt between companies, which together compensated for the contraction of reinvested earnings.

The information and communications sector with US$159.8 million are the largest contributor to total FDI flows, representing 36.7% of the total. For its part, the electricity sector contributed 26.6% of net flows, totaling US$115.8 million, highlighting non-conventional or renewable energies such as photovoltaics; while the industrial sector totaled a net flow of US$107.6 million, which in turn represented 24.7% of the total, thanks to investment in beverage, plastics, paper and cardboard companies, among others.

Finally, the Central Bank indicated that FDI companies during the first semester of 2019 remitted to their foreign shareholders US$492.6 million in dividend payments, reflecting a growth of 35.6% with respect to what was paid during January to June 2018; in addition, it represents the highest amount paid in such period in the last eight years. Incentives in the markets of origin, the free mobility of capital in the Salvadoran market and the liquidity of companies are among the main conditioning factors for the transfer of such resources.


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More on this topic

El Salvador: FDI Up 5% in 2018

April 2019

Last year, foreign direct investment in the country reached $1.855 million, 5% more than in 2017, mainly because of the behavior of industrial and commercial activity.

The industrial sector maintained its leadership as the sector with the highest net foreign direct investment, recording a net amount of $579.6 million, which results in a 28.6% growth, and represented 69% of the total net flow, explains a report from the Central Reserve Bank (BCR).

El Salvador: FDI Increases 5%

January 2019

During the first nine months of 2018, Foreign Direct Investment flows to the country totaled $457 million, almost 5% more than in the same period in 2017.

From the Central Reserve Bank statement:

At the end of the third quarter of 2018, increases in foreign direct investment (FDI) totaled US$1,221.8 million, reflecting a 24.1% increase (US$237.2 million) over the previous year.

Industrial Sector Receives More Foreign Investment

August 2018

During the first semester of 2018, direct foreign investment received by Salvadoran industry grew by almost 40% over the same period last year.

During the first quarter of 2018, Net Direct Foreign Investment increased by 42%, amounting to US $238.8 million. Gross entries totaled US $380.6 million, while gross outflows decreased by 34.4%, reaching US $141.9 million. 

Foreign Direct Investment Up 42%

July 2018

In the first quarter of the year, foreign investment flows received in El Salvador grew by 42% compared to the same period in 2017, rising from $168 million to $239 million.

The Central Reserve Bank reported that from January to March of this year " ... Net FDI was concentrated in four strategic sectors: industry, electricity, communications and trade, with investment flows channeled in the form of inter-company loans and reinvestment of profits."

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