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Caribbean & Central America - September 2019

Economic Highlights

PANAMA | FDI up. In August 2019 the United Nations Economic Commission for Latin America & the Caribbean (Eclac) released its latest report on foreign direct investment (FDI) to the region which showed that Panama continues to attract the most FDI in Central America. According to Eclac, ever since topping US$1bn in 2004, FDI inflows to Panama have been on an upward trend, with just four year-on-year decreases (in 2007, 2009, 2012, and 2017) since then. In 2018, inflows were up by 36.3% for a total of US$6.58bn making the country the fifth-largest FDI recipient in Latin America and the Caribbean. According to Eclac, capital contributions accounted for 1% of total FDI in 2018, while the largest share was made up of reinvested profits (50%), although they rose only slightly (4%) from their previous year’s level. The same report highlights that while disaggregated information by sector is not yet available for 2018, the mining industry is expected to have retained its buoyancy due to operations of the Canadian company First Quantum Minerals at the Cobre Panama mine. Eclac points out that in 2018 that company’s board of directors approved an estimated US$300m while in June 2019, the firm made its first shipment of copper concentrate and unveiled a further expansion (starting in 2023) entailing an estimated investment of US$327m. After Panama, Costa Rica accounted for the second-biggest amount of FDI (US$2.76m, -3.2% on 2017), followed by Honduras (US$1.2bn, 3.4%), Guatemala (US$1.03bn, -11.3%), El Salvador (US$840m, -5.5%), and Nicaragua (US$359m, -53.5%).

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