📉Global foreign direct investment (FDI) has continued to fall for more than two years, signaling a deepening slowdown in global productive capital flows, with no reversal of the downward trend expected by 2025, according to UNCTAD.

✍️By definition, in developing countries where domestic savings are low, foreign investment plays an important role in filling the capital gap and financing economic growth, modernization and integration into the world economy.

📊In Latin America and the Caribbean, the decline was 12%, with total FDI inflows to the region reaching $164 billion. This is the largest decline compared to other developing regions, although the number of new investment projects actually increased in some countries, including Argentina, Brazil and Mexico.

🌎This suggests that the regional decline does not tell the full story.

📊🌎The situation in different parts of the region is uneven and shows different trends, indicating that Latin America is no longer a monolithic investment destination.

➖Where the situation is worse:

🔹South America saw a significant drop in investment, particularly in key economies such as Argentina, Chile, Colombia and Brazil. However, Brazil retained its status as the region’s largest FDI recipient, largely due to investments in the renewable energy sector.

➕Where the situation is better:

🔹Central America saw modest growth, driven by Mexico's activity in the manufacturing and logistics sectors.

🔹The Caribbean grew by 21% to $3.9 billion, helped by strong flows to the Dominican Republic.

📈The most sustainable investment growth in the region is observed in the logistics and industrial real estate sectors. For example, over the past three years, the total volume of industrial space in the region has increased by 25%, reaching 87.3 million m². The leaders in this area are Mexico and Brazil.

🌎The situation in Latin America thus clearly demonstrates that stability has become a more important factor for investors than general regional affiliation. The success of Mexico and the Dominican Republic, against the backdrop of the decline in the Andean countries and other large South American economies, highlights that in today’s environment, only countries that can provide a predictable environment for business can attract capital.

Senior analyst of IPER Kostyleva A.A.

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