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Foreign capital inflow continues to decline in the region
Posted On 14 Aug 2017
Ecuadornews:
Flows of foreign direct investment (FDI) in Latin America and the Caribbean decreased by 7.9% in 2016 compared to 2015, totaling $ 167,043 million. This implies a 17% drop from its peak recorded in 2011, according to a report by the Economic Commission for Latin America and the Caribbean (ECLAC). This is the result of the low prices of commodities and their impact on investments directed to the natural resources sector, the slow growth of the economic activity in several areas and the global scenario of technological sophistication and expansion of the digital economy.
The ECLAC argues that despite the downward trend, FDI flows represent 3.6% of the region’s gross domestic product (GDP) when the global average is 2.5%. For 2017, it projected a new fall close to 5%. “The high productivity gaps that persist in the region and the new technological scenarios posed by the fourth industrial revolution demand new policies to take advantage of the benefits of FDI in national processes of sustainable development,” said Alicia Bárcena, executive secretary of the Cepal. (I)
