Foreign direct investment into Latin America rises 7.1% in 2024

Latin America and the Caribbean received a total of 188,962 million dollars of foreign direct investment (FDI) in 2024, which represents a 7.1% increase in relation to 2023, the Economic Commission for Latin America and the Caribbean (ECLAC) indicated on Thursday.

The figure represented 13.7% of the gross fixed capital formation and 2.8% of the gross domestic product (GDP), less than what was recorded in the 2010, when its participation reached 16.8% and 3.3%, respectively, according to estimates of the organization, which is part of the United Nations, in its report Foreign direct investment in Latin America and the Caribbean 2025.

ECLAC was not indifferent to the great volatility and global uncertainty, where Donald Trump’s tariff policy has generated a break in the international commercial order, and in its report it mentioned that, due to the important role of the United States as a destination for exports, “it can be expected that changes in tariff and commercial policies of that country influence investment decisions in the medium and long term.” What he considers can “be especially true in the case of the United States investors, who have announced projects in the region worth almost 138,000 million dollars since 2020”.

José Manuel Salazar-Xirinachs, executive secretary of ECLAC, said that, although the analysis focuses on 2024, and geopolitical tensions and uncertainty began to influence the investment decisions of companies last year. At a press conference in Santiago, he stressed that, “in the face of this current situation, derived largely by the commercial policy of the United States, we have been recommending to the countries to act with caution.”

The study was supervised by Marco Llinás, director of the Division of Productive and Business Development of ECLAC. “It is very soon to determine the impact of the changes on the US commercial policy,” he said.

The United States has been the main investor in the Latin American region, a role that has strengthened in recent years. Only in 2024 represented 38% of all investments in Latin America.

The impulse of Mexico and Brazil

Mexico and Brazil – today strongly threatened by Trump’s protectionism – stood out as the main engines of foreign direct investment in the region, with increases in their FDI flows of 47.9% and 13.8%, respectively. In contrast, Colombia, Chile and Argentina, despite their weight in the regional variation, got lower investment tickets than in the previous year.

In 2024, the number of cross -border mergers and acquisitions reached 326, decreasing 13.3% compared to 2023. Those of greater size were mainly in sectors such as services (including real estate and financial), commerce, energy, hydrocarbons and mining.

The analysis of the components that support this rise shows that it was largely promoted by the transnational companies that already operated in the region, mainly due to the greatest reinvestment of profits. The study also reveals that “given that in the component of capital contributions the entries of new investments are recorded, its relative stagnation reflects the low interest of new companies to be located in the region.” On this, Salazar – Xirinachs stressed the need to strengthen policies for attracting new actors, which are articulated with productive development strategies.