In the first seven months of this year, Chile received US$9,972 million in foreign direct investment (FDI), according to preliminary figures released this morning by the Central Bank of Chile. This represented an increase of 14% on the same period in 2019 when the inflow reached US$8,744 million. It was also 44% up on the average for the past five years and 27% up on the average for the period since comparable records began (2003-2020).
According to the Central Bank, there was an inflow of US$425 million in July.
As in previous months, the acting director of InvestChile, Juan Araya, highlighted the growth of FDI as good news in the midst of a complex international economic situation, which has hit trade and FDI in a number of countries around the world. “We need foreign investment in Chile to remain healthy, for more overseas companies to implement their projects in our country and, in this way, form part of the economic reactivation and job creation that Chile needs in order to recover from the pandemic’s negative effect on the economy. Overseas companies are an important source of jobs and it is important to recover the jobs lost as a result of Covid-19,” said Araya.
The most important component of FDI in the first seven months was equity, which represented an inflow of US$5,047 million. It was followed by related borrowing (US$2,482 million) and reinvested earnings (US$2,443 million).
Araya stressed the difficulty of forecasting the future performance of FDI, although some international organizations such as UNCTAD have anticipated that global FDI flows will contract by between 30% and 40% this year. “At InvestChile, we are working to minimize the pandemic’s impact on FDI in Chile. For this, it is vital that foreign investors continue to have confidence in our country as a place for their projects, which is what we have seen reflected so far in the figures and our day-to-day work with companies,” he said.