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Foreign investment in Chile up by 53% in first half

At US$9,801 million, the inflow in the first six months was the second highest for that period in comparable Central Bank records.

In the first half of the year, Chile received US$9,801 million in foreign direct investment (FDI), according to preliminary figures released this morning by the Central Bank of Chile. This represented an increase of 53% on the same period last year when the inflow reached US$6,391 million. It was also 64% up on the average for the past five years and 49% up on the average for the period since comparable records began (2003-2020).

According to the Central Bank, there was an inflow of US$2,105 million in June. May. As a result, the amount received in the first half was the second highest for that period in comparable Central Bank records.

The acting director of InvestChile, Juan Araya, stressed the importance that foreign investment in Chile remains healthy, despite the negative impact of Covid-19 on the global economy. “It is good news that, amidst the pandemic that is affecting the world, foreign investment in our country is not only proving resilient but also continuing to grow. More foreign investment means the permanence of projects in Chile, the development of new initiatives and, most importantly, more jobs, which is exactly what Chileans need and helps the economy’s recovery,” he said.

The most important component of FDI in the first half was equity, which represented an inflow of US$4,725 million, the highest figure since comparable records began. It was followed by reinvested earnings (US$2,938 million) and related borrowing (US$2,138 million).

Araya emphasized the ongoing dynamism of both equity and the reinvestment of profits as a clear sign that foreign investors continue to have confidence in the country.

“These figures mean not only that new overseas companies are coming to Chile but also that those with operations here are reinvesting. Our job, at InvestChile, is to support these companies so they continue to have confidence in Chile to materialize their projects and resume operations once the health crisis passes,” said Araya.  

In the case of the future performance of FDI, Araya indicated that it is not possible to make forecasts for the coming months in a volatile context in which UNCTAD has indicated that global flows may contract by between 30% and 40% this year. The figures released today by the Central Bank are preliminary and may be subject to corrections when it issues its next report on the national accounts on August 18.