Uruguay has experienced a marked decline in your income foreign direct investment (FDI) during the year 2023, after two years consecutive of growth. This change is observed in a broader context that affects Latin America. The report highlights that spanish companies, finnish, Argentinian and brazilian They are the main investors in the country.
As a whole, Latin America received a total of US$ 184,304 million in FDI during the past year, which represented a annual drop of the 9.9%. This decline was also reflected in Uruguay, which has seen a considerable decrease in the flow of foreign capital, thus breaking the ascending trend that had characterized the country in previous years.
A changing landscape for investment
A report prepared by the Uruguay XXI Institute documents that, despite the recent decline, Uruguay has positioned itself as a attractive destination for foreign investors. In recent years, the country has been able to consolidate its image as a reliable place to invest, which contrasts with the results of 2023.
Since the year 2001inward FDI flows in Uruguay showed a constant growthreaching a historic peak in 2013. However, between 2016 and 2018the country faced a contraction due to the loans that local companies made to their parent companies abroad. After that fall, a positive cycle began again from 2019which reached its maximum in 2022.
Figures and determining factors
The report details that in 2023 Uruguay received a total of net foreign direct investment by US$2,262 millionmarking a 31% decrease compared to the previous year. However, the net capital contributionswhich are considered the most genuine component of FDI, were positivetotaling US$501 million.
In terms of reinvestment of profitsthis aspect reached US$544 millionexperiencing a significant drop in relation to the previous year. This is interpreted as a natural adjustment after rebound observed in the years after the pandemic. Furthermore, the loans between related companies remained at values positive of US$ 1,217 millionwhich shows the volatility inherent to this investment category.
Positioning and perceptions
He Global Opportunity Index of the Milken Institute classifies Uruguay as the second best country in Latin America to invest, which underlines its attractive in this area despite recent challenges. He total stock of FDI in the country was US$37,701 million the previous year, constituting the 49% of the Gross Domestic Product (GDP), a relevant figure to analyze its economy.
The report clarifies that Spain It is the country that accumulates most of the investment in Uruguay, reaching the 18%. They follow him Finland with the 13%, Argentina with the 12% and Brazil with the 10%. Other nations that contribute are Netherlands, USA, Chili, Singapore, Swiss, Canada, Germany and Virgin Islandswith investment percentages that range between 8% and the 1%.
The investments coming from Spanish companies focus mainly on power generation projectswith emphasis on energy wind. Likewise, there is a growing interest in the service sectorwith special mention to the areas financial and fintech. Another significant part of the investments is allocated to food industryhe tourismthe agroindustrial production and the trade.
