A boom in foreign direct investment (FDI) between 2010 and 2013 has come to an end as the government announces an expected drop in foreign investment for both 2014 and 2015.
During 2013, while the FDI of Latin America decreased 6%, flows to Colombia increased 8% due to cross-border merges and acquisitions in electricity and banking industries, according to the United Nations Conference on Trade and Development.
Between 2010 and 2013, foreign investment grew from $6.8 billion to $16.8 billion.
Total foreign direct investment (1994-2013)
Central bank director Jose Dario Uribe had already warned that this boom would not continue in 2014 and he expected foreign investment by the end of the year to be 5% less than in 2013.
MORE: Colombia Central banker sees 5% drop in foreign investment for 2014
The banker’s statements were corroborated by Q1 figures and recently released figures for October that showed a 9.8% decrease in FDI.
According to economic newspaper Portfolio, experts said that FDI to Colombia could drop to between $10 and $13 billion in 2015, at best 23% less than last year.
Experts cited by the newspaper blame the steep drop in oil prices for the drop in investment.
According to the Central Bank, oil investments represent up to 70% of the total FDI.
MORE: Colombia finance minister calls for calm as dropping oil prices generate budget gap
Sources
- Más consumo interno en 2015, clave para que crezca la economía (El Colombiano)
- Bajan las expectativas de inversión extranjera en 2015 (Portafolio)
- En Octubre, cayó 9,8% la inversión extranjera directa (Portafolio)
- Balanza comercial negativa determina ampliación en el déficit de la cuenta corriente (BBVA Research)
