Costa Rica posts a 7 percent gain in foreign investments

Costa Rica received $1.4 billion in foreign direct investment in 2010, but that was just 7 percent higher than the previous year and lower than the $2 billion that came into the country in 2008.

This is the report from the Economic Commission for Latin America and the Caribbean, which also said that all Central American countries posted gains over 2009 except El Salvador where foreign investment plummeted from $784 million in 2009 to $431 million in 2010.

Panamá with a $2.4 billion investment shows a 33 percent gain in 2010 over 2009, and Honduras received a 52 percent boost from $523 million to $798 million, in part because of a government seen as more welcoming to capitalism.

According to the report Foreign Direct Investment in Latin America and the Caribbean 2010, the region’s main recipient was Brazil, where investment inflows posted a record surge of 87 percent, going from $26 billion in 2009 to $48.5 billion in 2010.

The second main recipient was Mexico ($17.7 billion), followed by Chile ($15.1 billion), Peru ($7.3 billion), Colombia ($6.8 billion) and Argentina ($6.2 billion).

For 2011, direct investment flows to Latin America and the Caribbean are expected to maintain this trend and
increase by between 15 percent and 25 percent, which could take them to unprecedented high levels, according to the projections of the report launched by the executive secretary of the economic commission, Alicia Bárcena, and the Mexican Minister of Finance and Public Credit, Ernesto Cordero.

The factors that resulted in the increased investment receipts in 2010 include the improved performance of developed economies and the buoyancy of certain emerging economies that boosted some sectors thanks to increased demand, said the report.

United States remains the main investor in the region and was responsible for 17 percent of the investments received in 2010, followed by the Netherlands (13 percent), China (9 percent) and Canada and Spain (both 4 percent).

The 13th version of this commission report highlights the emergence of the Asian giant China. In 2010, Chinese companies invested almost $15 billion in Latin American and Caribbean countries, fundamentally in the form of mergers and acquisitions.

Over 90 percent of confirmed Chinese investment in Latin America has targeted the extraction of natural resources.
In the medium term, this country’s transnational enterprises are expected to continue to be active in the region and diversify into infrastructure and manufacturing sectors, the report said.

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