Latin America attracts record foreign direct investment in 2022

Benefiting from the recovery in global spending after the covid-19 pandemic, Latin America and the Caribbean attracted a record volume of foreign direct investment (FDI) in 2022, the United Nations Economic Commission for America announced this Monday (10). Latin America and the Caribbean (ECLAC). Last year, the region received US$ 224.58 billion from other parts of the planet destined for the productive sector.

The amount is 55.2% higher than in 2021. According to ECLAC, for the first time in nine years this type of resource surpassed the US$ 200 billion mark. “FDI flows to the region have not exceeded US$200 billion since 2013, so the 2022 recovery sets an important investment milestone in the last decade,” the report highlighted.

Unlike financial investments, aimed at the financial market, direct foreign investments are aimed at job creation, such as the purchase of national companies or the expansion of foreign companies to other countries. According to ECLAC, the sectors most benefited in the last year were services, energy (renewable and non-renewable) and manufacturing.

In 2022, the number of mergers and acquisitions resulting from FDI increased by just 7%, yet the value of deals soared by 57%, reaching US$30.15 billion for the year. According to ECLAC, the increase is due to the resumption of investment and expansion plans by companies after the covid-19 pandemic.

When broken down by country, Brazil attracted 41% of FDI destined for Latin America and the Caribbean. In second place comes Mexico, with 17%. The two countries are the largest economies in the region.

low attraction

Despite growth, Latin America attracted only 8% of the global flow of foreign direct investment in 2022. Proportionally, the region had the lowest share, behind Europe, Asia-Pacific, Africa, the Middle East and North America.

Last year, the global volume of FDI added up to US$ 1.29 trillion, an increase of 11% compared to 2021. ECLAC’s calculation, however, eliminated the impact of the removal of companies in Luxembourg, a global financial center used by companies that operate in Europe and transfer their headquarters to the country.

In Brazil, the volume of FDI almost doubled from 2021 to 2022, growing 97%. In Mexico, the growth was smaller and reached 14% in relation to the previous year.