Foreign direct investment (FDI) in Latin America and the Caribbean fell by 9.9% in 2023 compared to 2022, totaling $184.304 billion.
This decline reduced FDI’s share of the region’s GDP to 2.8%. Despite this, Latin America and the Caribbean still accounted for 14% of global FDI, surpassing the 2010s average of 11%.
The drop in FDI was primarily due to significant decreases in Brazil and Mexico. Brazil saw a 14% decline, while Mexico experienced a 23% drop.
Mexico’s fall was largely due to extraordinary FDI flows in 2022 from the merger of Televisa and Univision and Aeroméxico’s restructuring.
Brazil’s decline under President Lula da Silva was driven by a 48% reduction in inter-company loans and a 14% decrease in capital contributions. Peru also saw a sharp 65% decline.
Regional Performances
Despite the overall decline, some countries saw positive trends. Argentina and Chile experienced FDI growth of 57% and 19%, respectively.
Central American nations like Costa Rica (28%) and Honduras (33%) also saw increased investments.
In the Caribbean, Guyana (64%) and the Dominican Republic (7%) were notable for their FDI growth.
Sectoral Trends
The services sector experienced the largest decline, with a 24% drop, though it remained the leading sector for FDI.
The manufacturing sector saw a 9% increase, driven by significant growth in Colombia (105%), Honduras (386%), Mexico (29%), and the Dominican Republic (13%).
This rise indicates a growing interest in nearshoring and friend-horsing strategies.
The natural resources sector also saw a 16% increase in FDI, driven by the demand for critical minerals and commodities essential for clean energy technologies.
This sector accounted for 23% of the region’s greenfield project value over the past two years, more than double that of other developing regions.
Global Context and Comparisons
Globally, FDI trends varied. Europe saw stable FDI inflows, with significant investments in green technologies and digital transformation projects.
Asia experienced mixed results, with strong growth in Southeast Asia but declines in China and India due to geopolitical tensions and economic slowdowns.
Africa saw increased FDI, driven by investments in renewable energy and infrastructure projects.
Challenges and Recommendations
ECLAC’s Executive Secretary, José Manuel Salazar-Xirinachs, identified three major challenges hindering the region’s development.
These are low, volatile, and unsustainable economic growth; high inequality and low social mobility and cohesion; and weak institutional and governance capacities.
He emphasized that FDI could help address these challenges, but this requires policies that focus on both attracting investments and ensuring their effective utilization.
Why This Matters
FDI plays a crucial role in driving economic growth, creating jobs, and fostering technological advancements.
For Latin America and the Caribbean, attracting and retaining FDI is vital for sustainable and inclusive development.
The region’s ability to leverage FDI for economic diversification and capacity-building will determine its future growth trajectory.
In 2023, Latin America and the Caribbean attracted 19 megaprojects valued at over $1 billion each, with 17 of these undertaken by investors outside the region.
In short, this indicates a continued interest in the region despite the overall decline in FDI.
Key Facts
— Deep Dive
Live Market IntelligenceBrazil — Live Market Board
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Brazil — Live Market Board
+1.39%
168,498.45
+1.39%
71,393.57
+0.43%
10,536.40
+0.68%
2,848,945
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2,485.26
+0.03%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 168,498.45 | +1.39% | +9.89% | 166,191.45 | 169,073 | 165,910 | — |
| USD/BRL | 5.50 | -0.17% | +2.56% | 5.51 | 5.50 | 5.50 | — |
| SELIC | 13.75% | — | — | — | — | — | |
| PETR4 | 45.36 | -1.28% | +46.28% | 45.95 | 46.11 | 44.96 | 48,070,100 |
| VALE3 | 64.04 | +2.19% | -2.23% | 62.67 | 64.28 | 62.02 | 19,033,100 |
| ITUB4 | 40.53 | +1.40% | +4.03% | 39.97 | 41.01 | 39.87 | 27,994,400 |
| BBDC4 | 14.20 | +3.12% | -24.10% | 13.77 | 14.22 | 13.74 | 45,455,000 |
| BBAS3 | 17.13 | +3.88% | -25.07% | 16.49 | 17.17 | 16.43 | 30,737,600 |
| B3SA3 | 14.39 | +0.21% | +9.85% | 14.36 | 14.58 | 14.11 | 34,510,800 |
| ABEV3 | 15.48 | +0.00% | +18.35% | 15.48 | 15.60 | 15.32 | 29,624,400 |
| WEGE3 | 48.19 | -0.23% | +9.75% | 48.30 | 48.83 | 47.32 | 13,176,900 |
| PRIO3 | 60.48 | -1.72% | +57.25% | 61.54 | 62.57 | 60.01 | 12,597,500 |
| SUZB3 | 53.40 | +2.12% | +9.76% | 52.29 | 53.42 | 50.10 | 13,908,400 |
| RENT3 | 30.29 | +4.20% | -26.39% | 29.07 | 30.53 | 28.18 | 22,414,400 |
| AZZA3 | 14.76 | +4.98% | -47.66% | 14.06 | 15.19 | 13.80 | 4,143,600 |
| CSNA3 | 4.41 | +8.89% | -48.12% | 4.05 | 4.52 | 4.01 | 27,297,200 |
| GGBR4 | 24.15 | +0.67% | +26.31% | 23.99 | 24.52 | 23.86 | 22,736,700 |
| ENEV3 | 26.84 | +1.98% | +40.16% | 26.32 | 26.84 | 26.10 | 7,781,400 |
— For the complete picture, read our in-depth guide: Mexico Economy 2026: GDP, Peso, Nearshoring, Banxico and Trade
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This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. How we use AI · Report an error
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