Nicaragua Remains Third Leading Country in Latin America in FDI as a Percent of its GDP

    WASHINGTON, DC, May 27, 2010 /24-7PressRelease/ -- Nicaragua remains, for the second consecutive year, the third leading nation in Latin America when measuring foreign direct investment (FDI) as a percent of each country's gross domestic product (GDP), according to a 2009 study conducted by the Latin Business Chronicle which analyzes FDI data from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) and GDP data from the International Monetary Fund (IMF).

In 2009, Nicaragua reported US$434 million in FDI and its GDP reached US$6.2 billion, which translates into a FDI/GDP rate of 7.1 percent. Even when experiencing a 31 percent decrease relative to 2008, Nicaragua's FDI figures can be considered positive when compared to the rest of the Central American region, as other countries that have traditionally been strong recipients of FDI experienced drastic drops, such as Honduras (-46.1 percent) and El Salvador (-45.5 percent).

In Latin America as a whole, FDI reached $76.7 billion last year, which represented 1.9 percent of the region's US$3.9 trillion economy, a decline from the 3.0 percent rate in 2008. However, FDI fell much more than Latin America's GDP, 42 percent versus 1.8 percent in 2008.

Given this assessment, the results achieved by Nicaragua in 2009 are relatively healthy and demonstrate the country remains an attractive destination for FDI, even when facing adverse market conditions.

According to the study, Chile, Panama and Nicaragua were the highest ranking countries in Latin America, with FDI-GDP rates of seven percent or more, while the rest of the countries achieved significantly lower rates, below five percent. Chile replaced Panama as the Latin American country with the highest foreign direct investment rate as a percent of its economy, while Venezuela replaced Haiti as the country with the lowest rate.

Recently, Nicaragua has made great advances to foster a favorable investment climate in the country through efforts such as the minimum wage agreement between the government, the private sector and labor unions, which guarantees the stability of employment within the free zone sector and promotes the creation of new and dignified jobs. Other efforts include the strengthening of the country's legal framework with the passing of legislations such as the Coastal Zones Development Law (Law 690) and the facilitation of business procedures through the opening of the Free Zones Services One-Stop Shop.

For more information about Latin Business Chronicle visit http://www.latinbusinesschronicle.com/app/frontpage.aspx.

PRONicaragua is the Nicaraguan Investment Promotion Agency, established in 2002. It is a non-profit, public-private institution whose mission is to generate economic growth and job creation in Nicaragua by attracting high-quality foreign direct investment. The agency provides complimentary support services to qualified investors seeking investment opportunities in our country. For further information, please contact us at (505) 2270-6400

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