The Diplomat
Spain remains the main destination for direct investment from Latin America in the world, with a total of 68,000 million euros last year, according to the report ‘Global Latam 2022’.
The aforementioned report, promoted by ICEX-Invest in Spain, in collaboration with the Ibero-American General Secretariat (Segib), and which was presented on Wednesday, points out that foreign direct investment (FDI) issued by Latin America grew by 75% in 2022 compared to the previous year.
Specifically, it reached an all-time high of 73 billion dollars (about 67.9 billion euros), which confirms a strong dynamism and an outstanding external presence of the region.
According to the authors of the report, whose presentation was attended by the Ibero-American secretary general, Andrés Allamand, this dynamic behaviour of investment abroad is mainly explained by the reinvestment of dividends, in addition to the strong recovery already experienced in 2021.
Global Latam 2022 also shows that regional integration through direct investment flows is much more advanced than that of intra-regional trade.
The report underlines that, among the destinations of Latin American investment, Spain is in first position, having already reached more than 68,000 million euros, which represents 11% of all foreign investment received by the country.
However, Latin American investment in Spain in 2022 was 1,101 million euros, 32.9% less than in the previous year. This is explained by one-off business restructuring operations registered in the previous year. The dynamism is manifested, however, in the substantial increase in the number of investment projects originating from the arrival in Spain of SMEs and startups from the region.
In 2022, 39 investment projects were announced in Spain, compared to 24 in 2021, reflecting a clear investment commitment by Latin American capital to the Spanish market, which is consolidating its position as the gateway to the European market.
Compared to Spain, last year, the investment projects announced by Latin American companies in Germany were nine, three in France and one in Italy.
Brazil, Mexico and Chile accounted for nearly 80% of the foreign direct investment issued in the period since the pandemic, a percentage that remains unchanged in 2022. The region’s leading foreign investor was Brazil, which invested 90% more in 2022 than the previous year, USD 30.694 billion (USD 28.550 billion), equivalent to 40% of the total.
For its part, Mexico recovered its traditional cross-border investment rhythm, multiplying the flow of investment by 50 to 16.878 billion dollars (15.7 billion euros). Meanwhile, Chile is the only country among the largest in the region that reduced its investment pace in 2022.
The sector in which most projects were carried out in 2022 was software and information technology services, reaching a total of 108. This figure is almost double the number of those for financial services (57), which is in second place.
It has also become clear in recent years that Latin America has an important role to play in the process of green transition and decarbonisation of the economy. From 2015 to the end of 2022, green bonds issued in Latin America amounted to USD 41.228 billion (EUR 38.354 billion), with a total of 291 bonds from 186 different issuers.
