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Foreign direct investment (FDI) in Latin America grew by 7.1 per cent in 2024 to $188.96 billion, but new investment interest has stagnated, the Economic Commission for Latin America and the Caribbean (ECLAC) said on Thursday.
WHY IT'S IMPORTANT
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.
KEY QUOTE
"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.
BY THE NUMBERS
FDI inflows in 2024 rose 7.1 per cent from 2023, representing 13.7 per cent of gross fixed capital formation and 2.8 per cent of GDP. However, these figures remained below the 16.8 per cent and 3.3 per cent, respectively, recorded during the 2010s.
Brazil received the largest share of FDI at 38 per cent, followed by Mexico with 24 per cent. Argentina saw a 44 per cent increase in natural resource investments, while Guyana experienced a 43 per cent rise due to more spending in its hydrocarbon sector.
WHAT'S NEXT
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.