Investment Monitor’s three investor guides for the Americas, covering the Caribbean, Central America and Mexico and South America, used 26 data points to analyse all countries, highlighting the winners and losers across the region by each measure. Following this, Investment Monitor has selected five countries in the Americas to watch in 2022.
Costa Rica is considered one of the most prosperous countries in Central America, enjoying three decades of stable economic growth. It is also one of the region’s top foreign direct investment (FDI) players.
Out of all countries analysed across Investment Monitor’s three Americas investor guides, Costa Rica saw the largest increase in FDI projects in a ten-year period. According to figures from the UN Conference on Trade and Development (UNCTAD), 41 projects were recorded in 2011, growing to 102 in 2020.
Costa Rica is also the region’s leading FDI destination per capita. In 2020, it attracted two projects per 100,000 people, far exceeding its closest competitor Grenada (0.9).
Despite the economic challenges posed by Covid-19, Costa Rica's FDI performance remains strong. According to figures from the Costa Rican Investment Promotion Agency, multinational companies generated a total of 19,806 new jobs in the country in 2020, an 18.4% increase from 2019. In 2021, 22,461 new formal jobs were created, growing by 13.4% compared with 2020.
In March 2021, business services giant Concentrix announced plans to create 1,000 new jobs in Costa Rica. In July of the same year, multinational semiconductor company Intel announced it was increasing investment in its assembly and testing operations from $300m to $600m and adding more than 600 jobs.
In addition, Costa Rica’s commitment to environmental protection is a unique selling point for many investors. The country’s 99.8% renewable electricity matrix makes it an attractive destination for companies looking to expand while prioritising sustainability.
In July 2020, UNCTAD named the Dominican Republic as the fastest-growing economy in Latin America and Caribbean region since 2010, with the country’s GDP growing by 5.8% per year on average.
The World Bank forecast 5.5% growth in the Dominican Republic's GDP in 2021 and 4.8% in 2022. This is above the growth projected for the wider Latin American and Caribbean region of 5.2% for 2021 and 2.9% in 2022.
Tourism is a key economic industry in the Dominic Republic and one of the sectors hardest hit by Covid-19. Despite this, recent figures show that the country is breaking pre-pandemic tourism records. A total of 519,349 tourists visited the Dominican Republic in November 2021, a 197% increase compared with 2020 and a 12% increase compared with 2019.
All hotel workers in the country are being fully vaccinated to strengthen safety for both staff and visitors. Overall, more than 4.3 million tourists visited the Dominican Republic between January and November 2021.
The country also has the lowest unemployment rate of all Caribbean countries analysed, at 6.1% in 2020. This is below the Latin American and Caribbean average of 10.4%.
Pre Covid-19, Colombia had been named as one of the fastest-growing economies in Latin America, with GDP reaching $323bn in 2019. The pandemic hit the country hard, but the government quickly implemented a comprehensive set of public health regulations and a large fiscal package to protect lives and livelihoods.
As a result, the country’s economy is recovering faster than expected. In the third quarter of 2021, GDP grew by 5.7% compared with the second quarter, led by the retail and manufacturing sectors. This is an increase of 13.2% from the third quarter of 2020.
In September 2021, the government launched its Hydrogen Roadmap, which outlines plans to develop, generate and use hydrogen as a long-term source of clean energy. It is estimated that Colombia can develop new value chains to boost its economy, generating approximately $5.5bn in investment and 15,000 jobs by 2030. Colombia also benefits from close access to the Pacific and Atlantic oceans and the Panama Canal, facilitating hydrogen exports to Asia, Europe and North America.
The plan reinforces Colombia’s commitment to reduce its greenhouse gas emissions by 51% by 2030 and become carbon-neutral by 2050.
In the third quarter of 2021, Chile was the fastest-growing economy among the 38 member states of the Organisation for Economic Cooperation and Development. Chile recorded the highest GDP growth rate at 17.3%, followed by Turkey (7.4%) and the UK (6.6%).
The Chilean economy is growing faster than expected in 2021, partly due to the success of the country’s vaccination roll-out and its various government stimulus packages.
The country is also benefitting from the rapid increase in global copper prices fuelled by growing demand from the electronics and construction sectors. Chile is the world's leading copper producer and saw exports of the metal grow by more than 35% to $4.9bn in November 2021. As a result, the country recorded a trade surplus of $834m in the same month.
The IMF predicts that Chile will record a GDP per capita of $30,000 by 2026. It will be the first South American country to reach this figure.
Uruguay recorded the highest GDP per capita in South America in 2020, reaching $15,438. Out of the countries analysed, it is the least corrupt and consistently scores highly on Transparency International’s Corruption Perception Index.
Following the onset of Covid-19, Uruguay was one of the countries best equipped to transition to remote working and distance learning. The country has the highest percentage of individuals with internet access in South America, at 83% in 2019.
Uruguay implemented a quick, effective Covid-19 vaccination roll-out with around 77% of the population double jabbed as of early December 2021.
The economy is estimated to grow by 3.4% in 2021 and 3.2% in 2022, driven by the reopening of contact-intensive sectors and the tourism industry. Inflation is expected to fall from 7.2% in late 2021 to 5.8% by late 2022.
In addition, the country’s unemployment rate fell to 8% in late 2021 and exports recorded between January and October 2021 are 41% higher than the same period in 2019.
The outlook is positive for these countries in the Americas region, all of which are displaying encouraging economic growth. Although Covid-19, and particularly the Omicron variant, will continue to pose stringent challenges, each looks well positioned to emerge from the pandemic in a healthy state.
Investment Monitor's investor guides split Latin America and the Caribbean into three regions to assess their investment attractiveness: