Latin America and Caribbean saw significant declines in greenfield foreign investment last year, according to figures from crossborder investment monitor fDi Markets which was published in The fDi Report 2013, an annual report from fDi Intelligence.
In 2012, the number of FDI projects into Latin America and the Caribbean declined by 19.52%, with the region attracting 1117 FDI projects. Capital investment decreased by an estimated 54.97% and the region also experienced an estimated 42.28% decline in jobs created.
Brazil dominates FDI in the region, attracting 432 projects in 2012, equal to almost two-fifths of FDI in Latin America and the Caribbean in 2012. The top two countries remained unchanged from 2011, with Brazil attracting 38.68% of FDI projects and Mexico attracting 21.84%, a combined market share of 60.52%. Argentina slipped out of the top four as FDI into the country fell significantly by 45% to 77 projects in 2012.
The fastest growing country was Chile, which experienced a 25.4% increase in project numbers in 2012. It was the only country in the region to record an increase in FDI projects in the year. The overall list of the top 10 countries remains unchanged from 2012. Of the top 10 countries, in terms of project numbers, five increased their market share in 2012, with Brazil’s share of FDI increasing by 2.65%, followed by Chile (2.53%), Mexico (1.96%), Colombia (0.11%) and Puerto Rico (0.08%).
FDI projects out of Latin America and Caribbean
Latin America and the Caribbean projects overseas fell by 31% in 2012, with only 187 FDI projects recorded. Brazil remained the top country for outward FDI, with 48 overseas projects recorded in 2012, accounting for 25.67% of FDI from the region.
However, Brazil’s market share of FDI from Latin America and the Caribbean declined by 4.96% in 2012, the largest decline in the region. Argentina experienced the fastest growth in outward FDI with a 95% increase in project numbers in 2012, in contrast to the decrease it experienced in inward FDI. Following this growth, Argentina increased its market share by 13.48%, accounting for just over one-fifth of outward FDI projects from Latin America and the Caribbean in 2012. Brazil and Argentina accounted for 46.52% of overseas FDI from Latin America and the Caribbean in 2012.
FDI projects into Latin America and Caribbean by sector in 2012
The top three sectors in 2012 were business and financial services with 249 projects, ICT with 224 projects, and transport equipment with 115 projects. These three sectors accounted for 52.64% of FDI projects into Latin America and the Caribbean in 2012. Electronic components and semiconductors was the fastest growing sector in the region in 2012, increasing its project numbers by 11.9%. Business and financial services was the only other sector to experience an increase in project numbers in 2012 with its market share increasing to 22.29%, demonstrating the growing attractiveness of emerging economies for services investment.
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