Background on Foreign Direct Investment (FDI) in Colombia
Foreign Direct Investment (FDI) in Colombia reached $3,142 million during the first quarter of 2025, accounting for 3% of the trimester’s GDP. However, this figure represents a 14.7% decrease compared to the same period in the previous year.
Key Sectors Receiving FDI
According to a report by the Bank of the Republic, the sectors with the highest participation in FDI were:
- Mining and Oil: 36%
- Financial and Business Services: 22%
- Manufacturing Industry: 13%
- Transportation and Communications: 9%
- Electricity: 7%
- Other Sectors: 13%
Distribution of Capital Contributions
The Bank of the Republic estimated that FDI income was distributed as follows:
- $1,384 million in capital participation
- $1,302 million in reinvested profits
- $457 million in net loan disbursements between companies with investment relations
Capital Outflows During Q1 2025
During the same quarter, capital outflows totaled $2,789 million. These outflows were attributed to:
- $2,100 million for the creation of foreign financial assets
- $689 million for direct investments
Breaking down these capital outflows, the reinvestment of profits accounted for $559 million, capital participation for $120 million, and loan disbursements between companies for $10 million. Colombian companies’ direct investments abroad were primarily in the financial and manufacturing sectors.
Key Questions and Answers
- What is Foreign Direct Investment (FDI)? FDI refers to the investment made by multinational corporations or foreign entities into a country with the objective of establishing a lasting interest and exercising control over decision-making in the company.
- Why is FDI important for Colombia? FDI plays a crucial role in the development of Colombia’s economy by providing capital, technology, and expertise. It contributes to job creation, infrastructure development, and overall economic growth.
- What sectors received the most FDI in Q1 2025? The mining and oil sector received the highest FDI (36%), followed by financial and business services (22%) and manufacturing industry (13%).
- Why did FDI in Colombia decrease in Q1 2025? The report does not explicitly state the reasons for the decrease in FDI; however, factors such as global economic conditions, political stability, and regulatory changes could have contributed to this decline.
- What were the main capital outflows during Q1 2025? The primary capital outflows were for creating foreign financial assets ($2,100 million) and direct investments abroad ($689 million).
