Report of the ECLAC Unit on Investment and Corporate Strategies of the Division of Production, Productivity and Management
From the document:
Foreign direct investment (FDI) in Latin America and the Caribbean fell by 16% in 2014 to US$ 158.803 billion. Outflows of FDI from the region were also down, by 8%. Both these trends were driven by the decline in prices of export commodities and the economic slowdown in the region. Nevertheless, FDI remains very important for the economies in the region, especially for smaller Caribbean economies.
Global FDI flows were down by 7% in 2014, but flows to developing and developed economies differed significantly. Flows to the developed economies fell by 14%, as FDI to North America plummeted by 54%, owing principally to a single divestment in the United States. The Russian Federation faced sanctions, among other economic challenges, which led to a 51% fall in inflows to the transition economies in 2014, while inflows to the developing economies rose by 5%. Decreased flows to both Latin America and the Caribbean (16%) and Africa (2%) were offset by a substantial increase to developing Asia (15%).
As a share of GDP, FDI inflows in Latin America and the Caribbean stood at 2.6%, which is somewhat lower than the region’s long-term average, although this proportion also varies significantly throughout the region. Smaller economies generally have high FDI-to-GDP ratios, with economies in the Caribbean regularly reaching levels as high as 10% of GDP. Larger economies typically have much lower ratios, for instance 1.5% of GDP in Brazil1 and 2.0% of GDP in Mexico.