In times of economic turbulence such as those experienced today in the world economy, portfolio investment is one of the items that is most often affected by uncertainty, because capital, as a general rule, begins to leave assets of riskier countries to seek ‘refuge’ in other safer options.
(Inflation of 9.7% and GDP of 6.9%: estimate by Banco de la República).
And, in this sense, the entry of this type of resources to Latin America, although it has performed well so far this year, is beginning to show signs of slowing down or, as happened in the last month, even a net outflow of this investment.
According to the latest report from the Institute of International Finance (IIF), published yesterday, Latin America as a whole registered during July a ‘breakaway’ of portfolio investment of US$2,600 million, which makes the seventh month of the year the second period so far in 2022 that closed in negative, after the outflow of resources for US$2.1 billion that was observed in April.
It is worth mentioning that, according to IIF, the two items that make up the portfolio investment -stocks and debt bonds- had a negative behavior this month. In this sense, while equities presented an outflow in foreign capital flows of only US$200 million, the rest of the total amount was contributed by fixed income, which in this period had a negative result of US$2.4 billion.
(Why Ecuadorians are spending their dollars in Nariño).
Of course, despite the negative figures shown in the report on the behavior of foreign capital for the month of July towards the region, it is important to mention that during 2022 there has been a very positive dynamic, so much so that in the set of these In the first seven months, portfolio investment inflows to Latin America amounted to US$30.7 billion, while in the two months with losses for the region, they totaled US$4.7 billion.
The figure for Latin America for July is included in a general outflow of capital from emerging markets during this month, for Asia also recorded a net loss in these flows of US$2 billion, which was only US$100 million in Europe and US$5.1 billion in the Middle East and Africa.
BRIEFCASE
–
