SANTIAGO, Dec. 2 (Xinhua) -- Foreign Direct Investment (FDI) in Latin America and the Caribbean could plunge by up to 55 percent in 2020 due to the pandemic, the United Nations regional economic commission said on Wednesday.
Inflows to the region reached 160.721 billion U.S. dollars in 2019, down by 7.8 percent from a year ago, the UN Economic Commission for Latin America and the Caribbean said in an annual report on Wednesday.
The amount is predicted to drop by 45-55 percent in 2020 due to COVID-19 related crisis, showing "the steepest decline" in regional FDIs this year, said the commission.
Worldwide, the amount of FDI is going to shrink by 40 percent in 2020, it said.
FDI has made relevant contribution to regional economy as it complements national investment, brings in new capital, and helps to expand export-related activities, said the report.
The inflows also facilitate the developments in automotive industry, telecommunications, digital economy and sectors with strategic importance amid the COVID-19 pandemic, such as the pharmaceutical industry and that of medical devices.
In presenting the report, the commission's Executive Secretary Alicia Barcena urged countries to make necessary policy changes to ensure FDI is used for driving a structural change.
"It is urgently necessary to restore the role of industrial policies as an instrument for transforming the region's productive structure," she said.