Latin America's foreign direct investment rose 7% last year, but new flows stagnate
FDI is a key driver of economic growth in Latin America, but lack of new investment has raised concerns about the region's long-term competitiveness and appeal to foreign investors.
"It is expected that changes in tariff and trade policies in the United States will influence medium- and long-term investment decisions," ECLAC said in its report.
FDI inflows in 2024 rose 7.1% from 2023, representing 13.7% of gross fixed capital formation and 2.8% of GDP. However, these figures remained below the 16.8% and 3.3%, respectively, recorded during the 2010s.
Brazil received the largest share of FDI at 38%, followed by Mexico with 24%. Argentina saw a 44% increase in natural resource investments, while Guyana experienced a 43% rise due to more spending in its hydrocarbon sector.
ECLAC urged Latin American governments to focus on strategies that sustain investor interest, particularly as manufacturing investment rises and services decline. The region may need to adapt to global tariff changes and reconfigure value chains to stay competitive.
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