Mexico Sets Half-Year FDI Record, While Brazil Retains Latin American Leadership

Mexico’s Economy Ministry reported 34.265 billion dollars in foreign direct investment in the first half of 2025, the highest half-year figure ever recorded. The total surpassed 31.096 billion dollars in 2024 and was more than double the level of 2017.

The composition of Mexico’s inflows shows that 84.4 percent came from reinvested earnings, with 9.2 percent from new equity and the rest from intercompany accounts. The United States contributed 42.9 percent, followed by Spain and Canada.

Within Mexico, Mexico City captured 56.4 percent, while Nuevo León, State of Mexico, Baja California, and Querétaro also attracted strong flows. By industry, manufacturing received 36 percent, financial services 26.7 percent, and construction 7.6 percent.

Brazil’s Central Bank reported 33.8 billion dollars in the same period, a 10.7 percent decline compared with the first half of 2024. June brought 2.8 billion dollars, underlining volatile monthly inflows.

Unlike Mexico, Brazil’s mix contained a larger share of new equity. Central Bank data show 6.4 billion dollars in equity flows in June, with 4.0 billion as fresh equity and 2.4 billion as reinvested profits, partly offset by negative 3.6 billion dollars in intercompany loans.

Looking beyond the half-year snapshot, Brazil’s FDI inflows reached 67 billion dollars over the 12 months through June, equal to 3.14 percent of GDP. Despite the slowdown, Brazil remained the largest FDI destination in Latin America.

Brazil Holds Regional Lead in FDI Despite Mexico’s Surge

UNCTAD data placed Brazil at 62 billion dollars in 2023 and 59 billion dollars in 2024, while ECLAC reported that the country captured about 38 percent of all FDI into the region in 2024, ahead of Mexico.

Sector data highlight Brazil’s telecommunications and information technology, which attracted 3.3 billion dollars in the first half of 2025, according to the Ministry of Communications.

Manufacturing, energy, and natural resources also continued to attract significant capital. The comparison shows two stories. Mexico recorded a historic surge but depended heavily on reinvested earnings.

Brazil reported smaller half-year inflows, but its annual totals remain higher, with a greater share of new capital and a clear lead in Latin America.

Foreign direct investment matters because it funds factories, infrastructure, and technology projects while also financing external deficits. Mexico’s results show strong confidence among existing investors and the impact of nearshoring linked to the USMCA.

Brazil’s broader base and higher annual totals demonstrate continuing appeal, though sustaining momentum will be essential as global liquidity tightens.

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