SANTIAGO – Foreign direct investment (FDI) fell 9.1 percent in Latin America and the Caribbean in 2015, compared to the previous year, to $179.1 billion, the lowest level since 2010, the Economic Commission for Latin America and the Caribbean, or ECLAC, said Wednesday.
The drop was caused by falling investment in the natural resources sector, especially mining and oil, and by the slowdown in the region’s economy, the ECLAC said.
The UN agency said in its annual report, titled “Foreign Direct Investment in Latin America and the Caribbean 2016,” that in 2016 “FDI will remain below the levels reached in recent years, in line with countries’ economic prospects.”
FDI “could decline as much as 8 percent, although it will continue to be an important factor in the region’s economies, so it is necessary to attract quality flows,” the ECLAC said.
Brazil, which has been mired in a deep recession and a political crisis, saw FDI drop 23 percent to $75.07 billion in 2015, but Latin America’s largest economy was still the region’s leading recipient of FDI, accounting for 42 percent of the total.
FDI rose 18 percent to $30.28 billion in Mexico, one of the highest levels in seven years.
The plunge in commodity prices and problems in the mining industry affected Chile and Colombia, which registered drops of 8 percent and 26 percent, respectively, in FDI.
Argentina, however, saw FDI soar 130 percent to $11.65 billion.
In 2014, Argentina’s FDI dropped because the 2012 nationalization of 51 percent of oil company YPF was finally accounted for, reducing investment flows by nearly $6 billion.
Central America registered an increase in FDI of 6 percent to $11.8 billion, while FDI fell 17 percent to $5.9 billion in the Caribbean.