CHANGES IN LATIN AMERICA FDI / GEOPOLITICAL FUTURES

Weekly Graphic: Changes in Latin American FDI Brazil and Mexico remained the largest recipients of foreign investment. By: Geopolitical Futures (click to enlarge) Foreign direct investment in Latin America in 2025 reflected a global landscape marked by uncertainty and a shift in U.S. trade policy.  As a whole, FDI grew 1.7 percent from a year earlier, to $194.2 billion.  Brazil and Mexico remained the two largest recipients.  With 4.8 percent growth, FDI in Brazil neared the all-time highs of the 2010s.  Mexico, however, saw a 5 percent drop thanks to an 80 percent fall in Chinese FDI and a 20 percent decline in the automobiles sector.  The U.S. (35 percent) and Europe (32 percent) represented the largest sources of FDI.  Investment from the U.S. declined by 11 percent, while investment from the EU grew 29 percent, led by the Netherlands (56 percent). Investments in mining greatly benefited Ecuador – which saw the largest increase, primarily driven by internal reforms and a $1.2 billion agreement to develop an oil field with China’s Sinopec – while Peru, Bolivia and Chile received reinvestments from existing projects.  Uruguay saw an exceptional jump in late November with investments for a new green hydrogen and e-fuels complex.  On the other hand, investments in Colombia dropped in response to the domestic political climate, with non-oil and non-mining FDI falling more than 27 percent.  The biggest crash was in Argentina, where FDI fell to negative levels for the first time since 2003, driven by a stagnant economy – despite the government’s investment incentive scheme.