01 August 2025

Central America attracted US$3.12b in Foreign Direct Investment in the first quarter of 2025, a 2.8% increase year-on-year. The biggest winner was El Salvador with US$322m in investment, 65% more than in 2024. Conversely, Panama suffered the greatest loss with US$526m, 51% less than the previous year. With US$921 in FDI, Costa Rica received the most but this was still a 25% drop compared to 2024. According to the Costa Rica Central Bank, 70% of FDI came from the US with medical devices remaining the most important sector. Free trade zones, perhaps suffering due to stalled infrastructure improvements, saw the biggest declines in FDI. Across the region, financial intermediation, manufacturing and trade were areas of biggest increases. Arguments that some countries need to diversify and strengthen regulatory frameworks are backed up by Guatemala’s attempt to pass anti-money laundering legislation. FDI in Latin America and the Caribbean reached US$188.96 billion in 2024, a 7.1% increase over the previous year according to an Economic Commission for Latin America and the Caribbean (ECLAC) report.

Source: Central America Briefing | Vol 13, Issue 15