COSTA RICA NEWS – Foreign direct investment (inversión extranjera directa – IED,in Spanish) fell 50% in the first quarter of this year as compared to the same period last year, according to the Banco Central (Central Bank).
The Bank reports that in the first three months of 2014, the inflow of foreign capital to productive projects was US$483 million dollars, while last year it was US$925 millon.
The decline was attributed mainly to a lower investments in real estate, which had an inflow of only US$218 million in the first quarter of this year, as compared to US$377 million in the same period last year.
According to the Coalición Costarricense de Iniciativas de Desarrollo (Cinde) – the Costa Rican Coalition for Development Initiatives – last year was an exceptional year for real estate investment, with an 41% increase over the first quarter of 2012.
The decline was not felt only in the real estate sector.
Free Zona (Zona Franca in Spanish) companies saw a 20% drop in foreign investment. The Central Bank says that companies operating out of Free Zones saw an inlfux of US$106 million dollars during the first three months of the year, some 60% less than for the same period in 2013.
The origin of foreign capital is mainly from the United States with US$211 million dollars, representing 44% of the foreign investment enterting the country in the first quarter.
Spain as second with US$70 million.
The Central Bank says that much of the money came into Free Zones to companies such as Citi Group, Procter & Gamble and IBM, which recently expanded its operations in Costa Rica.
Newcomes during the first quarter include the Korean textile company, SAE-A Spinning, Canada’s Gildan Activewear and Brightstar, the information technology and services company from the United States.