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Caribbean & Central America - August 2018 (ISSN 1741-4458)

Economic Highlights

FDI up. On 5 July the United Nations (UN) Economic Commission for Latin America & the Caribbean (Eclac) released its latest report on foreign direct investment (FDI) to Latin America and the Caribbean (LAC) which showed that overall FDI to Central America was up 4.5% in 2017 compared with the previous year, to reach US$13.08bn. This is in contrast to the LAC average which fell 3.6% in 2017. The Eclac report notes that the sub-region continues to be an important export platform for the goods destined for the US. In particular, clothing (in all countries excluding Panama and Costa Rica) and electronic manufacturing industry (especially in Honduras and Nicaragua) remain important recipients of FDI, however new industries now challenge them such as medical equipment made in Costa Rica. Across the various countries, the Eclac report notes that Panama by far remains the main recipient, accounting for US$6.07bn of FDI in 2017 (a slight increase on the US$5.99bn in 2016). This is followed by Costa Rica (US$2.99bn, a slight increase on the US$2.96bn in 2016), Honduras (US$1.19bn up from US$1.14bn), and El Salvador (US$0.79bn up from US$0.35bn). The countries in Central America to have registered a decline were Guatemala (where FDI dropped from US$1.19bn to US$1.15bn) and Nicaragua which dropped from US$0.899bn to US$0.897bn).

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