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Foreign Investments in Peru fell by 17% in 2016

Foreign investment in Latin America and the Caribbean fell by 14% to US$ 142 billion in 2016. This marks the fifth consecutive year of decline in foreign investment. In Peru specifically, one of the top five recipient countries of direct foreign investment (FDI), in 2016 the country only manage to attain US$ 7 billion worth of foreign investment, approximately 17% less than the previous year.

The fall in foreign investment has been felt equally throughout the Caribbean, Central America and South America, thus confirming the downward trend that has been observed in recent years. According to economists from the United Nations Conference on Trade and Development (UNCTAD), this fall is due to an unprecedented economic recession, weak commodity prices and currency volatility.

However, despite the current downward trend, it is expected that in 2017 FDI will increase by 5% (approximately US$ 1.8 trillion) worldwide. These projections reflect the expectations of economic growth, an increase in trade and a recovery of corporate profits.

In 2016 the United States continued to be the largest recipient of FDI, attracting approximately US$ 391 billion worth in investments. With that in mind, the United States, China and India are projected to be the top recipients of FDI in 2017.

UNCTAD executives have expressed confidence in the development and growth of Asia’s economic performance and have moderate optimism for the rest of the world, excepting Latin America and the Caribbean. While the moderate increase of 5% is hopeful, oftentimes geopolitical risks and political uncertainty can hinder full FDI recovery.

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