Latin America FDI rises, while new project pipeline weakens

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Latin America FDI trends

Highlights

FDI inflows to Latin America and the Caribbean rise 14% to $188 billion in 2025, exceeding average 2% growth across developing markets.
Brazil's FDI inflows increase from $63 billion to $77 billion and Mexico's from $38 billion to $41 billion, together accounting for two-thirds of the region's total.
The value of announced greenfield projects drops about one-third to below $120 billion, with Mexico plummeting from $44 billion to $24 billion and Argentina from $37 billion to $1.4 billion.

UNCTAD data shows uneven investment momentum

As reported by UNCTAD, citing UN Trade and Development in its World Investment Report 2026, FDI inflows to Latin America and the Caribbean, excluding Caribbean offshore financial centres, rise 14% to $188 billion in 2025. That leaves the region with roughly one-fifth of all FDI going to developing economies, outpacing the 2% overall growth recorded across developing markets as a group.

South America drives much of the increase, with Brazil's inflows climbing from $63 billion to $77 billion and placing it among the world's five largest recipients. Mexico also posts growth, with inflows rising from about $38 billion to $41 billion, supported by regional production networks and continued investment in services and manufacturing.

The gains remain concentrated among a small number of markets. The top 10 recipient economies capture 95% of total regional inflows, while Brazil and Mexico alone account for roughly two-thirds of the total.

Falling greenfield plans cloud regional outlook

The report shows a weaker pipeline for new productive capacity, with the value of announced greenfield projects falling by about a third to less than $120 billion. Mexico's announced project value drops from $44 billion to $24 billion amid trade and industrial policy uncertainty, while Argentina's falls from about $37 billion to just $1.4 billion.

That pattern suggests more capital arrives in 2025, but less of it is being committed to new factories, logistics platforms and supplier networks. UNCTAD says the region still offers advantages including abundant natural resources, expanding renewable energy potential and strategic proximity to major trading partners.

The report points to stronger investment facilitation and aftercare, better logistics and energy infrastructure, supplier development and deeper regional integration as the main steps needed to narrow the gap. It adds that countries rich in minerals or renewable energy need strategies that create more local value instead of relying mainly on commodity-linked inflows.

Our earlier article on China’s tighter restrictions on Brazilian beef imports explained that Beijing will apply an additional 55% tariff on above-quota volumes from October 1, with Brazil’s quota set at 1.1 million metric tons. We noted that China did not agree to Brazil’s request to use Uruguay’s unused quota and that the measures, alongside other external curbs, could weigh on Brazil’s export outlook and broader market access conditions.

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