Spanish Investment in Latin America: an optimistic outlook  

As every year, Casa de América (Madrid) has opened a space for researchers, academics, journalists and businessmen from the region to unveil the fifteenth annual report Panorama de Inversión Española en Iberoamérica, developed by IE University, Auxadi, Llorente y Cuenca, and Iberia.

The event was attended by ambassadors from different Latin American countries such as Mexico, Brazil, Panama and Chile, as well as businessmen and investors from different investment associations with a presence in the Latin American continent.

The director of the report and Professor of Economics at IE Business School Juan Carlos Martínez Lázaro revealed that, according to the report, almost 76% of the companies surveyed indicated that they will increase their investment in the region in 2023.

On his part, Victor Salamanca, CEO of consultancy firm Auxadi, pointed out that, as the report shows, Latin America will continue to be an attractive market for Spanish companies, and that Auxadi will continue to support Spanish companies in their global expansion, as they have been doing for more than forty years.

The Global COO of communications consultancy Llorente y Cuenca, Luisa García, also highlighted that 2023 would be a relevant year for investment in Latin America, and recalled that the Spanish Presidency of the Council of the EU in 2023 will bring valuable opportunities to promote business activity in Spain and Latin America.

The first roundtable of the presentation event discussed the "Economic prospects for Spanish investment in South America" ​​while the second one explored the "Economic prospects for Spanish investment in Central America and Mexico."

Some of the statistics and data provided by the report are:

-  Despite the weak economic growth of the last decade, Spanish companies continue to bet on Latin America as a region of the future.

-  Mexico is the country with the highest percentage of investment by Spanish companies, followed by Colombia, Chile, Brazil and Peru.

-  Almost 50% of the Spanish companies surveyed have stated that the high inflation rates have somewhat affected their sales levels during 2022. Additionally, it was mentioned that inflation has peaked and in some countries has begun to decline.

-  Almost 70% of Spanish companies believe that the economic situation in Latin America will be similar to last year and even 20% rate it as good or very good.

-  Panama repeats as the country with the best economic performance, followed by Uruguay, the Dominican Republic, Mexico and Colombia. Cuba, Argentina and Nicaragua will be the countries that will have a more complicated economic situation.

-  Almost 80% of Spanish companies perceive an increase in their investments in Latin America, because they think that their businesses will continue to grow in the region. More than half of the investments will be made through organic growth.

-  Mexico, Colombia, Chile and Brazil will be the countries in which more Spanish companies plan to increase their investments during 2023.

-  An increasing number of Spanish companies believe that their turnover will increase in Latin America within three years. In contrast to this, they believe that this will not be the case in the US, Canada, the European Union and Asia.

-  Some of the competitive advantages that Latin America offers Spanish companies to invest are: internal market, competitiveness, skilled labor, and free trade agreements.

-  46% of companies do not consider Chinese companies in Latin America to be relevant competitors.

In conclusion, economic activity has an optimistic outlook despite the fact that the economic, political and social climate does not seem to be the most favorable in some Latin American countries. Despite this, everything seems to indicate that Spanish investments in Latin America will increase during 2023.
We know that in political and social matters, Latin America and the Caribbean are experiencing particularly complex situations due to their political instability, as has been demonstrated with what has been experienced in Peru and Brazil, but this offers an opportunity for public-private collaboration to achieve a sustainable recovery and thus ensure confidence in the rest of the world.

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