Caribbean, Latin America lost $1 billion due to COVID-19 pandemic, ECLAC says
SANTIAGO, Chile — Latin America and the Caribbean received US$105.48 billion in Foreign Direct Investment, FDI, in 2020 – 34.7 percent less than in 2019, 51 percent less than the record high achieved in 2012, and the lowest since 2010, the Economic Commission for Latin America and the Caribbean (ECLAC) indicated during the presentation of the annual “Foreign Direct Investment in Latin America and the Caribbean, 2021”
Globally, FDI dropped by 35 percent in 2020 to approximately $1 trillion dollars, which represents the lowest since 2005. Latin America and the Caribbean have experienced a downward trend since 2013, which has spotlighted the relationship between FDI flows and commodity price cycles, mainly in South America, according to comments on the report from Alicia Bárcena, the UN’s regional organization Executive Secretary.
The report suggests that in the current international context, global FDI flows will recover slowly, and the search for assets in sectors considered strategic for international recovery, and plans to transform the productive structure (in such fields as infrastructure, the health industry, digital economy), indicates most of these operations will be centered in Europe, North America and some countries in Asia.
For Latin America and the Caribbean, FDI projects experienced a rebound between September 2020 and February 2021. However from that month to May 2021, it appears that a new drop occurred. “In this scenario, it is difficult to imagine FDI inflows into the region could increase by more than 5% in 2021,” ECLAC’s report states.
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