ECLAC: Peru foreign direct investment up 61% in 1Q 2017

COP20 Centro Financiero Lima San Isidro Surco

COP20 Centro Financiero Lima San Isidro Surco

13:49 | Lima, Aug. 10.

Peru posted a 61% rise in foreign direct investment (FDI) in the first three months of 2017 and is expected to see further increase with measures implemented by the government, the Economic Commission for Latin America and the Caribbean (ECLAC) affirmed Thursday.

ECLAC Executive Secretary Alicia Barcena explained said result "was driven by greater reinvested earnings rather than by new incoming capitals."

The senior UN official underlined Peru's positive alternatives to attract investments in renewable energies given the potential of southern areas, as well as port and infrastructure development opportunities. 

"President Kuczynski is concerned about investment reactivation and he has made several announcements to boost investment in various sectors. He also expects the second half of the year to be much better for Peruvian economy," Barcena told Andina news agency. 

"The public investment boost announced by President Kuczynski will seek to jumpstart private investment, particularly concerning infrastructure," she added. 

2016 FDI drop

The Andean nation thus attempts to bounce back from a 2016 downturn when "FDI flows into Peru dropped by 17% and totaled US$6.863 billion," ECLAC's Foreign Direct Investment in Latin America and the Caribbean 2017 briefing paper revealed. 

"Reinvested earnings grew 39% year-on-year and were the largest component of investment in 2016 [61% of the total]," the report reads. 

ECLAC explains the decline was mainly the result of lower capital inflows (-47%) and, to a lesser extent, of lower intercompany lending, which fell 57% and accounted for 7% of FDI. 

However, the study underlined investment announcements rebounded in 2016, with "the highest values earmarked for transportation and logistics and renewable energies projects (33% and 25% of the total value of announcements, respectively)."

Peru, fifth in LatAm 

With FDI valued at US$6.863 billion, Peru recorded the fifth largest FDI inflow in Latin America and the Caribbean in 2016. 

The first four spots were taken by Brazil (US$78.929 billion), Mexico (US$32.113 billion), Colombia (US$13.593 billion) and Chile (US$12.225 billion). 

Click here to read the report.


Published: 8/10/2017