The amount implies an increase of 22.57% over 2021, with the tourism sector being the largest flow with (US$759.2 million)
Foreign direct investment (FDI) flows in the Dominican Republic would have reached the historic sum of US$3,802.2 million during 2022, thus surpassing the levels of 2021 by 22.57%, of 2019 by 25.85%, and its highest amount recorded in 2017, (US$3,500 million, up 6.5%).
In fact, already in September of that year, according to data available on the portal of the Dominican Republic Export and Investment Center (ProDominicana), they had already surpassed the 2021 amount, reaching US$3,190.0 million, US$779.1 million additional (32.3%) with respect to that period a year earlier.
The flow presented that year, as indicated, was mainly driven by investments in the tourism (US$759.2 million), energy (US$687.3) and Trade and Industry (US$524.1 million) sectors.
In this regard, the Central American Monetary Council’s (CMCA) Balance of Payments Report for the CARD Region, to the third quarter of 2022, highlights that the communication sector had an outstanding rhythm in the country, adding US$168.1 million in foreign investments. This is a sector that for several years presented negative indicators.
During 2022, the United States remained as the country with the largest issuer of investments to the Dominican Republic, surpassing other countries by more than 1,000%. It totaled US$1,074.0 million in the first nine months, while Mexico registered US$290.1 million, followed by Canada with US$265.0 million, Spain with US$247.6 million. The British Virgin Islands rounded out the top five nations with the highest amount injected with US$235.8 million.
At the regional level, net Direct Investment (DI) flows (acquisition of financial assets minus net liabilities incurred) from Central America and the Dominican Republic (CARD) totaled US$7,603.3 million (2.9% of regional GDP). The amount is higher than the FDI captured during the same period of 2021 (US$6,985.2 million, 3.0% of GDP).
Meanwhile, foreign direct investment by directional direction received accounted for US$8,118.3 million (including intra-regional investments), an amount higher by 6.1% with respect to that recorded in the same period of 2021 (US$7,648.2 million). Likewise, it is basically due to the increase in ID captured by the Dominican Republic, Honduras and Nicaragua.
In fact, according to the Central American Monetary Council (CMCA) report, these three countries are the main recipients of these resources in the region and together captured 86.3% of total ID (including intra-regional ID).
In this regard, as of September, the Dominican Republic, Honduras and Nicaragua presented increases in the flow of net DI, with increases of US$779.1 million, US$387.2 million and US$206.2 million, respectively.
During the first nine months of 2022, the region increased its direct investment liabilities with the rest of the world by US$8,423.3 million, essentially in shares and equity investments (US$7,337.0million), where reinvestment of profits has an important weight as a source of financing (60.7% of liabilities).
While in the Dominican Republic direct investment inflows totaled US$3,190.0 million, US$779.1 million (32.3%) more than in January-September 2021, Costa Rica received US$2,240.1 million in DI in 2022, US$361.1 million less if compared to the same period of the previous year.
Even so, investments destined to the manufacturing activity of medical equipment and high technology companies stand out.
In Nicaragua, net foreign direct investment totaled US$1,160.6 million, 21.8% higher than in the same period of 2021 (US$952.9 million), with the manufacturing industry followed by energy and mines, commerce and services as the economic activities with the highest attraction of resources.
As of September 2022, the balance of primary income (income) of Central America and the Dominican Republic totaled net payments for US$12,217.0 million. This was an inter-annual increase of US$1,046.1 million when compared to the same period of the previous year, the report indicates.
Such behavior was determined, according to the report, by the increase in the net payment of direct investment income (US$1,512 million more). Among the total payments, for an amount of US$14,494.9 million, those of FDI stand out (US$9,812.9 million), of which 50.1% corresponded to reinvested profits.
Likewise, interest payments (portfolio investment and other investment) totaled US$4,143.9 million, higher than the amount observed in the previous year (US$3,882.3 million).
The FWCC details that, by country, the largest absolute increase in net payments was obtained by Costa Rica, influenced by the increase in reinvested earnings of direct investment companies; followed by Nicaragua (reinvested earnings) and Honduras, with dividend payments and withdrawals of income from quasi-corporations.
Meanwhile, income received by the CARD region totaled US$2,277.8 million, US$628.8 million higher than that obtained in 2021 (US$1,649.0 million).
Most of this came from interest generated by other investment (deposits and loans) and income from reserve assets (international reserves), in addition to employee remuneration.
Foreign exchange inflows to the Dominican Republic during the first nine months of 2022 from exports of goods, tourism, remittances, foreign direct investment, and other income from services, amounted to US$29,115.9 million, US$4,118.8 million more than in the same period of 2021.
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