Investing in Chile: FDI Hits Historic Record

Investing in Chile has hit a historic record in 2021, with $13.72 billion of foreign direct investment (FDI) entering the country in the first six months of the year — a 66% increase on the same period last year.

That figure far exceeds the $8.23 billion that entered the country in the entire of 2020 and represents the highest level of FDI witnessed in a six-month period since current recording methods began in 2003 (all figures in USD).

The record was announced by Chile’s central bank and offers just the latest sign that the South American country is firmly on the path to recovery following the economic turmoil caused by the global pandemic.

“This is one more indicator of the dynamism and good projections of our economy at all levels,” Lucas Palacios, Chile’s minister of the economy was quoted as saying.

According to Palacios, analysis shows that the growth was not driven by a particular sector, but reflects a general trend for recovery and growing interest in investing in Chile.

SEE ALSO: Starting a Business in Chile: Some Considerations

Notably, this new record for investing in Chile in a six-month period is 92% higher than the average seen over the past five years, and 98% higher than the average for the entire 2003 to 2021 period of modern recording methods.

According to Andrés Rodríguez, director of the country’s official investment promotion agency InvestChile, “this is a clear sign that the activity of foreign investors in Chile is going through an extraordinary moment, despite the pandemic.” 

Another record broken as Chilean economy recovers

News of investing in Chile hitting a historic high is just the latest economic record to be broken, as the country makes firm strides towards recovery.

Earlier this month, it was announced that Chile had broken its year-on-year monthly economic growth record for the second month in a row, with growth in June 2021 reported to be 20.1% higher than in the same month last year. 

That represented the highest year-on-year monthly growth record since recording began in 1986 and a 2.1% increase on record set in May.

The announcement of FDI in Chile hitting a new record will only serve to bolster investor confidence in this well-developed market.

The popularity of investing in Chile has helped its economy become one of the fastest-growing in Latin America over recent decades. 

Thanks to a pro-business outlook and one of the highest levels of economic freedom in the world, the country has long been a popular destination for foreign capital, and with investing in Chile now hitting historic highs, the outlook for the future grows increasingly positive.

Chile is well known for its mining sector, thanks to rich deposits of copper, gems, and precious metals. It is also recognized as a global beacon of free trade, with a large portfolio of free trade agreements (FTAs) providing locally-based businesses with preferential access to key markets throughout the world.

A BLH infographic providing a snapshot of the market in Chile, a popular destination for investing among foreign companies
A snapshot of the market in Chile

The country is known as a promoter of regional integration, being a founding member of the Pacific Alliance — a 10-year old economic association that also includes Colombia, Mexico, and Peru, and has ambitions to expand beyond the region.

Meanwhile, ongoing talks for an FTA with Paraguay represent the final step towards Chile establishing free trade agreements with all members of the Southern Common Market (Mercosur), another major regional integration initiative that also includes Argentina, Brazil, and Uruguay.

All of these factors add up to make investing in Chile an enticing opportunity to foreign corporations.

Source: Bizlatinhub

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