Foreign direct investment grew by 43% in Uruguay in 2020

This is the highest figure since 2012. In contrast, there was a sharp decline worldwide.
Publication date: 06/07/2021
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According to the annual report of the United Nations Conference on Trade and Development (UNCTAD), in 2020 foreign direct investment (FDI) grew by 43% in Uruguay. This is the highest figure since 2012 and comes in a context of a sharp decline in Latin America, which recorded a drop of 45%, as well as in the rest of the world, where the drop reached 35%.

The report highlighted that the country had the "lowest levels of COVID-19 infection in the region" and invested US$ 625 million through the Coronavirus Fund. It also stressed the "dynamism of the technology industry" and the implementation of "various tax benefits granted to eligible projects under the investment promotion regime", as stated by the Uruguayan Ministry of Economy and Finance on its website.

"FDI inflows recovered quickly from the fall recorded in the first quarter of the year as new equity investments increased and inter-company lending expanded. Looking ahead, the doubling of the number of greenfield projects in information and communication, which represent more than 37% of all announced projects, points to a thriving industry," the publication added.

Globally, the COVID-19 pandemic lock-ups were one of the causes of the slowdown in investment projects, while the prospect of a recession led multinational companies to re-evaluate new projects. As a result, global FDI flows "plummeted by 35% in 2020, to $1 trillion from $1.5 trillion the previous year," according to the UNCTAD report.

Furthermore, the report notes that "the fall was heavily skewed towards developed economies, where FDI fell 58%, in part due to corporate restructuring and intra-firm financial flows".

In the region, foreign investment in Latin America fell 45% to US$ 88 billion in 2020, the largest drop among developing regions. In South America alone, FDI plummeted 54% to US$ 52 billion.

 

Read more about this article at the Uruguayan Ministry of Economy.


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