Latin America’s FDI Freeze: Why Capital Is Looking Elsewhere
Investment is slowing, trust is eroding, and short-term deals aren't enough. The latest data reveal a region at risk of missing the FDI moment — unless it shifts its strategy.
Foreign Direct Investment (FDI) has long been a pillar of Latin America's economic strategy. From Brazil’s industrial heartlands to Mexico’s maquiladora zones, foreign capital has helped build infrastructure, create jobs, and integrate regional economies into global value chains.
But in 2024, three heavyweight reports — from the World Bank, CEPAL, and now UNCTAD — are sounding the alarm: the region is not just attracting less capital. It’s attracting the wrong kind.
The World Bank flagged a 9.9% drop in FDI across Latin America and the Caribbean in 2023, with Brazil and Mexico leading the decline. CEPAL confirmed this trend, placing inflows at just 2.8% of regional GDP — and falling.
The latest data for 2024 published in UNCTAD’s World Investment Report 2025 shows FDI fell by a further 12% across the region, with South America shrinking 18%, and project finance deals collapsing in value.
The downturn is driven primarily by falls in flows to Argentina, Chile, Colombia and Brazil, in that order.
And while global FDI is fragile across the board, Latin America is falling behind even by emerging market standards. The World Bank finds that in the aftermath of economic shocks and natural disasters, Latin America recovers more slowly than Asia or Sub-Saharan Africa. The region is becoming an afterthought — not a destination.
👉 What explains this shift? The answer is as political as it is economic.
Keep reading and you’ll uncover the full picture: a breakdown of where capital is still flowing, which sectors are showing resilience, and how institutional weaknesses are holding the region back. Drawing on data from the World Bank, CEPAL, and UNCTAD, this piece also unpacks the deeper story behind the numbers — and what Latin America must do to compete in a world where trust matters more than tax breaks.