Foreign capital inflow to Latinamerica should increase by 21% this year over 2009 particularly because of Brazil and Mexico anticipates the Institute of International Finance, the world’s largest bankers’ association.
According to IIF estimates the region is to receive this year 190.4 billion US dollars in private capital compared to 156.6 billion in 2009.
“The growth in capital inflow is more concentrated in direct foreign investment which is the most appropriate to spur economic growth” said Yusuke Horiguchi, IIF economist who added that this kind of investment tends to remain longer; it is not speculative and also favours technology transfer.
Direct foreign investment is estimated to reach 87 billion US dollars this year compared to 66.6 billion last year and could jump to 97.1 billion in 2011.
Foreign investment in Latinamerica collapsed in 2008 as a direct consequence of the global slowdown and financial crisis and only begun to recover in 2009, said Horiguchi who nevertheless described this year’s increase as “modest”
Actually Brazil and Mexico will be most responsible for the surge. In spite of controls to restrict the inflow of capital, Brazil is expected to attract 96 billion USD compared to 77.1 billion last year, while for Mexico the numbers are 37.2 billion and 21.9 billion.
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