Wednesday, 16 January 2019 10:38

Increases in foreign direct investment exceed US $1,200 million: BCR

Written by Dinero

At the end of the third quarter of 2018, increases in foreign direct investment (IED) totaled US $ 1,221.8 million, reflecting an increase of 24.1% (US $237.2 million) with respect to the previous year.

The industrial, information and communications and financial sectors stood out in these transactions, which represented more than 70% of the total, the Central Reserve Bank said. The increase in IED is the highest recorded in the first three quarters, since 2010.

The gross decreases of IED totaled US $765 million, with a growth of 39.6%, mainly associated with the payment of debt with the parent company or related companies, and the resources sent as investment income (dividends).

The Central Bank also mentioned that the increase in retained earnings or dividends paid exceeded 80%, and totaled US $478.6 million, of which US $193.2 million correspond to the industrial sector, equivalent to 40.4%; US $122.9 million were sent by the financial sector, representing 25.7%, while the electricity and commerce sectors sent US $56.4 million, and US $44.1 million, respectively.

The net flow amounted to US $456.8 million, with a variation rate of 4.7% compared to the previous year; In addition, it represents the third consecutive year in which the third quarter exceeded US $ 400 million, the Central Bank explained.

The industrial sector consolidated as the central axis of the inflows of foreign direct investment in El Salvador, and recorded a growth of 54.6%, and a net flow of US $ 412.8 million for the period evaluated. These results are directly associated to the diversification in consolidated economic activities, among which are those of textiles, and clothing, beverages, detergents, extraction, fish conservation, maintenance services, among others items.

The Central Bank indicated that the United States was the main source of FDI flows totaling US $ 166.8 million, to the third quarter of 2018. Second, Panama has net investments amounting to US $ 157.2 million, reflecting an increase of 4.6%, and in third place is Guatemala, which accumulated net flows of US $111.3 million. The foregoing demonstrates the importance of intraregional investment between the countries of Latin America and other countries of the American continent.