SANTIAGO Ė Foreign direct investment in Latin America and the Caribbean plunged 7.9 percent in 2016 and is expected to fall another 5 percent this year, the UN Economic Commission for Latin American and the Caribbean (ECLAC) said Thursday.
Regional FDI has declined by 17 percent since reaching a peak of $206.9 billion in 2011, ECLAC says in a report released in Santiago.
The nations of Latin America and the Caribbean received a total of $167.04 billion in FDI last year, according to the study, which attributed the downward trend to a decline in commodity prices and the slump affecting several major economies in the region.
At the same time, ECLAC suggested that the shift toward a digital economy is leading toward a concentration of FDI in developed countries.
Latin America and the Caribbean accounted for 10 percent of global FDI in 2015 and 2016, down from an average of 14 percent during the period 2011-2014.
ECLAC pointed out that FDI represents 3.6 percent of cumulative regional GDP, compared with an international average of 2.5 percent, reflecting the proportionally greater importance of inflows from abroad.
Recession-plagued Brazil, the regionís largest economy, remained the undisputed leader in FDI last year, with an inter-annual increase of 5.7 percent to $78.9 billion.
The flow of FDI to Mexico decreased 7.9 percent to $32.11 billion, or 19 percent of the regionís total.
Colombia enjoyed a 15.9 percent surge in FDI, receiving $13.59 billion, ahead of Chile, with $12.23 billion.
Panama and the Dominican Republic were the biggest beneficiaries in Central America and the Caribbean, respectively.
The leading sources of FDI were the United States, 20 percent, and the countries of the European Union, 53 percent. China was the No. 4 investor, when taking into account merger-and-acquisition activity, ECLAC said.