Foreign investment strengthens

Amid the gloom over the world economy, there is a ray of sunshine. Central American foreign direct investment increased significantly this year, although some countries are doing better than others. In the first six months of 2011, Panama received $1.41 billion of foreign direct investment, a year-on-year increase of 14.5 per cent. Costa Rica attracted $1.1 billion, an impressive 45 per cent increase.

Several of the region’s weaker economies have also done well. Honduras and Nicaragua have caught the eye of foreign investors in sectors such as wind-power and floriculture. Honduras received $486 million in foreign direct investment in the first half of the year, an increase of 14.8 per cent. Nicaragua got $284 million, a 32 per cent increase.

El Salvador can expect a half-year amount of around ($340 million (based on data showing $171 million in the first quarter), a bit of a low figure for an economy, which only a few years ago was perceived as one of the most dynamic in the region. Even so, this would be more than the country received in the whole of 2010.

Results from Guatemala are not yet available, but are expected to show modest growth.