Foreign direct investment in Nicaragua increases in the first half of 2021
Recently, the Central Bank of Nicaragua (BCN) published an update and report on the evolution of Foreign Direct Investment in Nicaragua during the first half of 2021. Income from Foreign Direct Investment amounted to USD 632.1 million, which represented 1.9 times the amount recorded in the same period of 2020.
According to the information published, this increase was mainly due to new investments in the energy and mining sector, and to higher reinvestments of profits in companies in the manufacturing, telecommunications, and trade and services sectors, among others. This update was made with data from the Quarterly Foreign Investment Survey, which consults 225 companies with foreign capital participation.
According to the speech given by the President of the Central Bank of Nicaragua, in 2020 the negative impact of the COVID-19 pandemic on the income and net flows of Foreign Direct Investment was observed. However, in the first half of 2021, these showed a recovery trend, aligned with the recovery of economic activity and the world economy. This behavior was similar to that of the rest of the countries in the Central American region, Panama, and the Dominican Republic.
In terms of the source of investment, the United States accounted for USD 214.4 million, representing 37.1 percent of total net inflows. From Canada and Mexico, net flows of USD 101.1 million (17.5% of the total) and USD 76.3 million (13.2% of the total), respectively, were recorded. From Central America, net inflows from Panama totaled USD 80.3 million (13.9% of the total), followed by Costa Rica with USD 18.5 million (3.2% of the total). From other regions, the net flow from Spain stood out with USD 49.1 million, which represented 8.5 percent of total inflows for the period.
With the observed trend, the Central Bank of Nicaragua is projecting that by the year 2021, Nicaragua will end up with a gross Foreign Direct Investment income of around USD 1.20 billion.
Dania Navarrete
dania.navarrete@garciabodan.com
Senior Associate
García & Bodán
Nicaragua