What are the Latin American countries with the greatest increase in foreign investment (and what does it say about their economies)

However, although the FDI increased, at the same time there was a stagnation in the arrival of new investors to the region.

How do you explain that? Basically because FDA includes several things in the same basket.

On the one hand, it reflects the arrival of fresh capital from the outside (technically known as the capital contribution). On the other, it includes the reinvestment of profits made by a foreign company in the same country. And, finally, the FDI also considers the loans that companies make with each other.

What happened in Latin America in 2024, according to data from the Economic Commission for Latin America and the Caribbean (ECLAC), is that the increase in foreign investment came from the side of the reinvestment of funds made by international companies that already operated in the region, instead of the entry of new multinational companies.

The stagnation in the arrival of new investments “reflects the low interest of new companies to be located in the region.”

Looking at the general panorama, Doyran states that FDI data “are good news and bad news at the same time”, since companies installed in the region reinvirt their profits instead of taking them away, but the entry of new capitals stagnated.

Among the largest economies in the region, FDI registered the highest increases in three countries: Peru (57%), Mexico (48%), and Brazil (14%).

What does this say about your economies? Basically, Dioran maintains, the data suggests that investors “have more confidence” in those three countries.

This is important, he adds, because investments in these countries represent long -term commercial commitments, something that reflects that investors see favorable conditions to do business, growth potential, in addition to economic and political stability on the horizon.

The case of Peru is quite unique. Unlike the regional trend, the greatest promoter of foreign investment growth were capital contributions, that is, the arrival of fresh funds from abroad, while the reinvestment of profits and loans between banks fell.

Peru is known as one of the great foreign investment receptors, says Doyran, because it is one of the most open economies in the region, especially in areas such as mining, infrastructure or energy, in which there are fewer regulations than in other nations.

It has also contributed to the 57% increase in FDI (which reached US $ 6,800 million in 2024) the recovery of the mining sector and the global prices of raw materials.

In 2024 three megaprojects in Peru were announced: the construction and operation of a new Circunvalación road in Lima; the development of a green ammonia production plant fed by solar energy in the Arequipa region; and the expansion of the copper and zinc mine of Antamina (the most important announcement in the metal sector since 2019).

Mexico occupies the second place on the list with an IED increase of 48% to reach US $ 45.3 billion, the highest annual figure since 2013.

A part of the IED increase, indicate experts, is related to “nearshoring” or the relocation of companies near the US market, amid the commercial tensions that exist between the first economy of the world and China.

And, at the same time, the fact that investors have continued to trust the commercial environment offered by the country contributes.

According to ECLAC data, most of the IED increase is explained by the reinvestment of profits of companies that already operate in the country, followed by loans between companies.

By sectors, the manufacturing was the largest promoter of foreign investments in Mexico last year and the United States continued to be the main source of FDI tickets in the country (with a 23%increase) in relation to the previous year, followed by Japan and Germany.

At present, there is a certain level of uncertainty about US investment plans in Mexico, before the policy of President Donald Trump to impose, as of August 1, cars tariffs, steel, aluminum, metallic pieces and tomatoes produced in Mexico.

Despite uncertainty, the International Monetary Fund (IMF), projected economic growth in Mexico of 0.2% for this year, a more positive estimate than the contraction foreseen above.

Finally, Brazil is, where the arrival of foreign capitals increased by 14% to the US $ 71,000 million, mainly due to the reinvestment of profits of the companies already present in the country.

The manufacturing was the sector that attracted the most foreign investment in 2024, mainly in the oil derivatives market, biofuels and coke (a material used mainly in the steel industry).

“It is good for investments to increase in the manufacturing sector in Brazil and Mexico,” says Doyran. It is a positive sign, he explains, because manufacturing usually creates more jobs and those jobs can generate more added value to products.

On the other side of the ranking, the countries where IED further lowered in 2024 were Argentina (-53%), Chile (-32%) and Colombia (-15%).

And in Central America, on the other hand, investments increased in all countries, highlighting the case of Panama with an increase of 36%.

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