Foreign Direct Investment in Latin America and the Caribbean Plunged 99% in 2023
ECLAC Reports Slight Upwards Revision, GDP Growth Projected to Reach 1.5% in 2024
The Economic Commission for Latin America and the Caribbean (ECLAC) has released its latest report on foreign direct investment (FDI) in the region. The report shows that FDI fell by a staggering 99% in 2023, from $184.5 billion in 2022 to just $1.8 billion in 2023. This is the largest decline in FDI on record in the region.
The sharp decline in FDI is largely due to the global economic slowdown, which has led to a decrease in investment in emerging markets. ECLAC also cites the ongoing political and economic instability in the region as a factor contributing to the decline in FDI.
Despite the sharp decline in FDI, ECLAC has revised its growth forecast for the region slightly upwards. The Commission now expects regional Gross Domestic Product (GDP) to grow by 1.5% in 2024, up from a previous forecast of 1.3%. This would mark a slight improvement over the 1.7% growth recorded in 2023.
The upward revision in the growth forecast is due to several factors, including a slight improvement in the global economic outlook, a pickup in domestic demand, and increased investment in infrastructure. However, ECLAC warns that the region's economic recovery is still fragile and that there are several downside risks, including a further deterioration in the global economy, political instability, and natural disasters.
ECLAC's report also highlights the region's widening productivity gap. The Commission notes that the region's productivity growth has been lagging behind that of other developing regions, and that this gap is widening. This is a major concern, as it means that the region is falling behind in terms of competitiveness and economic growth.
To address the challenges facing the region, ECLAC is calling for increased investment in education, infrastructure, and innovation. The Commission also emphasizes the importance of promoting regional integration and cooperation.
The Preliminary Overview of the Economies of Latin America and the Caribbean is an annual publication that provides an overview of the economic performance of the region. The report is based on data from national statistical offices and other international organizations.
The report is an important resource for policymakers, businesses, and investors who are interested in the economic development of Latin America and the Caribbean.
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