SANTIAGO (Reuters) — Latin America and the Caribbean received record flows of foreign direct investment (FDI) last year, a United Nations report showed on Monday, mostly into services, manufacturing and energy as spending recovered after the pandemic.
The report by the U.N. Economic Commission for Latin America and the Caribbean (ECLAC) found that FDI, or income from cross-border asset purchases, surged 55.2% from 2021 to hit $224.58 billion last year, the highest level ever recorded.
“FDI flows to the region had not surpassed $200 billion since 2013, so the 2022 recovery marks a major investment milestone for the past decade,” ECLAC said in the report.
Cross-border investments in 2022 largely centered on the region’s services, hydrocarbon and manufacturing sectors, ECLAC said, helping push up the contribution FDI brings to the region’s gross domestic product (GDP) to 4.0%.
The number of mergers and acquisitions increased 7%, but the value of the deals soared 57% to reach $30.15 billion over the year.
ECLAC said the recovery was likely a result of companies, many of which held onto their profits during the coronavirus pandemic, now resuming investment and growth plans.
Brazil, the region’s biggest economy, took the lion’s share of investments at 41%, while Mexico, the second-largest, took 17%.
Worldwide, ECLAC reported a 11% increase in FDI when stripping out the impact of “substantial divestments” in Luxembourg, a global financial hub.
(Reporting by Natalia Ramos and Sarah Morland; Editing by Devika Syamnath)