Brazil continues to dominate FDI in Latin America and Caribbean

Brazil dominated FDI in the Latin America and the Caribbean region in 2011, attracting 491 projects – more than one-third of all the FDI in the combined region – last year, according to a report released by fDi Intelligence.

While Argentina recorded the fastest growth in inward FDI in 2011, Brazil dominated overall FDI in the region with a 38% increase of FDI projects in the same period – the fastest growth recorded by any of the world’s largest economies. A long-touted success story, Brazil has been steadily attracting more FDI projects since 2007. The trend continued in 2011, with the country attracting the highest absolute number of FDI projects since fDi Intelligence began recording FDI data in 2003, and capital investment also growing by 48%. fDi ’s figures relate solely to greenfield investment and exclude mergers and acquisitions.

Most countries in Latin America and the Caribbean saw a growth in FDI projects, with the combined region as a whole increasing its global share of FDI to 10%, from 9% in 2010 and only 5% in 2006. Mexico and Argentina, respectively the second and third highest recipients of FDI projects after Brazil, secured 267 and 141 projects.

Brazil was also the main outward investor from the region, tallying 81 FDI projects – an 11% increase from 2010. This figure bucks a regional trend: the number of FDI projects established overseas by Latin American and Caribbean companies fell by 6% overall in 2011, compared with 10% growth in 2010. But the potential for growth is still enormous – as a source country for FDI, Brazil still accounts for less than 1% of global FDI projects and 0.5% of global capital invested.

Software, IT services and communications leading sector for FDI

Software, IT services and communications was the leading sector for FDI in Latin America and the Caribbean in 2011, with an estimated $36bn of FDI. Major projects were seen in information and communication technology infrastructure, with both Telecom Italia and Spain-based Telefonica investing $2.5bn in Brazil and Chile, respectively, to deploy their fibre-optic networks and expand their wireless capabilities.

A mixed global picture

The FDI results for Latin American and Caribbean countries are set against a mixed global picture – 2011 was a challenging year for the global FDI market. Even though companies continued to be attracted to the investment opportunities in Africa and Latin America, natural disasters in Asia-Pacific and economic and political instability in Europe, north Africa and the Middle East led many companies to put on hold their FDI plans, leading to a sharp decline in FDI in many countries. fDi Intelligence recorded a 29% decline in the number of FDI projects investing in Egypt, a 25% decline in Japan, a 35% decline in Thailand and a 22% decline in projects investing in Italy.

Nevertheless, against the backdrop of another tumultuous year for the world economy, foreign investors have remained cautiously optimistic with slow but solid growth in FDI. The global number of FDI projects increased by 5.6% in 2011, faster than the 3% increase in 2010. 

 -ends-

For further information please contact Dino Ribeiro, dino.ribeiro@ft.com or +44 (0)20 7873 3964. 

Download the full fDi Report 2012 at http://www.fdiintelligence.com/fDiReport.

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Notes to editors

Referencing – please state the source as fDi Intelligence from The Financial Times Ltd.

About the fDi Report 2012

The fDi Report 2012 is published by fDi Intelligence, part of The Financial Times Limited.  It draws on data from the fDi Markets database which tracks greenfield investment projects. It does not include Mergers & Acquisitions (M&A) or other equity-based or non-equity investments. Only new investment projects and significant expansions of existing projects are included. fDi Markets is the most authoritative source of intelligence on real investment in the global economy and the only source of greenfield investment data that covers all countries and industries worldwide. Retail projects have been excluded from this analysis but are tracked by fDi Markets.

The data presented includes FDI projects that have either been announced or opened by a company. The data on capital investment and job creation is based on the total investment the company is making at the time of the project announcement or opening. As companies can raise capital locally, phase their investment over a period of time, and can channel their investment through different countries for tax efficiency the data used in this report is different to the official data on FDI flows. The data from fDi Markets is more accurate and a real time indicator of the real investment companies are making in their overseas subsidiaries.

The data shown includes estimates for capital investment and job creation derived from algorithms (patent pending) when a company does not release the information. The World Bank, UNCTAD, Economist Intelligence Unit and over 100 governments around the world as well as major corporations use our data as the primarily source of intelligence on greenfield investment trends. 

About fDi Intelligence

• fDi Intelligence, a division of The Financial Times Ltd, is the largest FDI centre of excellence globally. Specialising in all areas relating to foreign direct investment and investment promotion, the full suite of services includes: location advertising to generate brand awareness; industry-leading intelligence tools to develop FDI strategies and identify potential investors; and tailored FDI events and investor roundtables to meet target companies and generate business leads.

• Products within the portfolio include fDi Markets, a database tracking crossborder greenfield investment on a real-time basis; fDi Benchmark, a database which benchmarks global locations on their attractiveness to foreign investors; and fDi Magazine and its website fDiIntelligence.com.

About The Financial Times

The Financial Times, one of the world’s leading business news organisations, is recognised internationally for its authority, integrity and accuracy. Providing essential news, comment, data and analysis for the global business community, the FT has a combined paid print and digital circulation of 604,856 (Deloitte assured, 3 October 2011 to 1 January 2012) and a combined print and online average daily readership of 2.2 million people worldwide (PwC assured, November 2011). FT.com has more than 4.5 million registered users and 285,475 paying digital subscribers. The newspaper, printed at 22 print sites across the globe, has a global print circulation of 316,493 (ABC, March 2012).