By: Staff Writer
July 22, 2025
The Economic Commission for Latin America and the Caribbean (ECLAC) in a recent foreign direct investment report said that that FDI inflows are up 7.1 percent in 2024 compared to 2023.
The report, Foreign Direct Investment in Latin America and the Caribbean (LAC), 2025, said: “FDI inflows in Latin America and the Caribbean amounted to US$ 188.962 billion in 2024, representing a 7.1 percent increase relative to 2023, and accounting for 13.7 percent of gross fixed capital formation and 2.8 percent of GDP, lower than in the 2010s, when they represented 16.8 percent and 3.3 percent, respectively.
“However, analysis of the components supporting this growth shows that it was driven by transnational firms already operating in the region, owing mainly to increases in reinvested earnings, while equity inflows remain stagnant.
“Given that the equity inflows component includes new investments, its relative sluggishness is an indicator of new companies’ limited interest in operating in the region.”
The report also said: “In 2024, FDI inflows grew in Central America, Mexico and the Caribbean, while results in South American countries were mixed.
“The largest boost came from increases in FDI to Brazil (by 13.8 percent) and Mexico (by 47.9 percent), which were the top two recipients of FDI, accounting for 38 percent and 24 percent of total inflows, respectively. Colombia, Chile and Argentina placed third, fourth and fifth, respectively, but all three recorded weaker FDI inflows than in 2023.”
ECLAC urged LAC governments to focus on strategies that sustain investor interest, particularly as manufacturing investment rises and services decline. The region may need to adapt to global tariff changes and reconfigure value chains to stay competitive.
“In 2024, there were 326 cross-border mergers and acquisitions in the region, down by 13.3% from 2023. Of the top 20 transactions of 2024, the largest involved services firms, including in real estate and financial services, commerce, electricity, gas and water, and telecommunications, as well as hydrocarbon production and mining,” the report also said.
It continued: “Data for countries reporting the origin of FDI inflows in 2024 show that the United States has held its position as the region’s largest investor, accounting for 38 percent of invested value.
“The relative share of investment from the European Union (excluding Luxembourg and the Kingdom of the Netherlands) fell to 15 percent of the regional total in 2024, the lowest figure since 2012.
“Investment originating from Latin America and the Caribbean represented 12 percent of FDI inflows, making it the third-largest region of origin. Meanwhile, investments originating from China and Hong Kong, China have generally represented a small proportion of FDI inflows reported in balance-of-payments statistics and, in2024, Chinese FDI accounted for just 2 percent of total inflows.”
Lastly, In the LAC by sector, communications has been the leading recipient of project announcements in terms of value, reflecting its function of providing connectivity and its central role in supporting critical infrastructure for artificial intelligence, such as data centres and high-speed networks.
“The software and information technology services sector, meanwhile, leads in number of announcements, accounting for more than half (52 percent) the total number, in addition to being a significant source of quality jobs.”