Foreign investment into Latin America and the Caribbean declined by 12% in 2024, amounting to $164b, as reported by the latest World Investment Report from the United Nations Conference on Trade and Development (UNCTAD).
This downturn was especially evident in South America, where key economies like Argentina, Brazil, Chile, and Colombia saw a significant reduction in investment inflows. Despite an 8% drop in foreign direct investment (FDI), Brazil continued to lead the region as the largest recipient of foreign capital, thanks to ongoing investments in renewable energy sectors.
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In response to the changing investment landscape, policymakers across the region have focused more on investment promotion, introducing innovative FDI attraction strategies for priority sectors such as green hydrogen.
On a more positive note, countries like Guyana and Peru reported substantial gains, primarily driven by developments in mining and offshore oil projects. Central America also saw modest growth, with Mexico at the forefront due to investments in manufacturing and logistics.
The Caribbean region stood out as it experienced a 21% increase in FDI, reaching $3.9b, largely driven by inflows into the Dominican Republic.
Trends differ across FDI subsectors
Greenfield investments—where companies establish new operations abroad—saw an increase in both number and value, particularly in sectors such as refined petroleum, the digital economy, and renewable energy.
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By GlobalDataArgentina and Brazil were significant contributors to this growth, with Argentina benefiting from major investments into its energy sector.
Conversely, cross-border mergers and acquisitions plummeted in the region, impacted by significant asset sales and a slowdown in market activity in Brazil. Additionally, international project finance, essential for funding infrastructure and public services, continued to decline in volume and value across much of the region, especially in South and Central America.
However, the Caribbean stood out with a notable increase in project finance activity, providing a positive contrast to the broader regional trends.
Brazil, Chile, Jamaica, Peru, and Uruguay emerged as key destinations for international project finance, particularly in renewable energy and infrastructure projects. Major international companies are spearheading initiatives in areas such as green fuels, hydrogen, solar energy, and lithium mining, typically utilising the build-own-operate model to secure long-term investment commitments.
In 2023, the region received $187b in FDI.
