Latin America and the Caribbean Witness $224.579 Billion in Foreign Direct Investment

The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) has released its latest report on Foreign Direct Investment (FDI). According to the organization, Latin America and the Caribbean received a record $224.579 billion in FDI in 2022, representing a 55.2% increase compared to 2021.

The United Nations' ECLAC comprises 46 member states, including 20 from Latin America, 13 from the Caribbean, and 13 from other regions.

The report reveals that almost all Latin America and the Caribbean countries experienced an increase in FDI during 2022. Topping the list is Brazil, which received 41% of the regional total, positioning itself as the fifth-largest global destination for FDI. Following Brazil, the Latin American countries that attracted the most FDI were Mexico, with 17%; Chile, with 9%; Colombia, with 8%; Argentina, with 7%; and Peru, with 5%.

Regionally, 54% of Foreign Direct Investment was allocated to the services sector. However, the manufacturing and natural resources sectors also experienced a recovery. The report also highlights investments in financial services, electricity, natural gas, water, information, communications, and transportation within the services sector.

During a press conference in Santiago, Chile, the Executive Secretary of ECLAC, Jose Manuel Salazar-Xirinachs, emphasized the importance of attracting and retaining FDI that contributes effectively to the region's productive, sustainable, and inclusive development. He noted that FDI brings new opportunities in the context of the reconfiguration of global value chains and the geographic relocation of production due to changing globalization, as seen in the case of Mexico, where nearshoring has propelled unprecedented development in the industrial sector, as reported in SiiLA REsource.

Salazar-Xirinachs stressed that the challenge is not only to attract and retain FDI but also to maximize its contribution to development. To achieve this, countries must focus on post-establishment policies for productive development, including promoting productive links, expanding value chains, developing human resources, and improving infrastructure and logistics.

ECLAC highlights that the global FDI landscape in 2022 was diverse. While Latin America, the Caribbean, and other regions experienced growth, FDI inflows decreased in the United States and some countries in the European Union. Overall, global FDI inflows decreased by 12% compared to 2021, reaching $1.29 trillion.

Foreign investments in the real estate market

FDI drives the real estate sector by providing financing, generating employment, modernizing infrastructure, promoting tourism, and stimulating the local economy. These effects contribute to the growth and development of the real estate sector, as well as the overall economic development of countries.

Mexico is an attractive destination for foreign investors seeking business opportunities and expansion in the region due to its economic and political stability, strategic location as a bridge between North and Latin America, extensive network of trade agreements, growing domestic market, natural resources, strategic sectors, skilled workforce, and incentives and facilities offered by the government.

Currently, investments in Latin America are breaking records. As part of its research, SiiLA has been monitoring the presence of international actors in the region's commercial real estate market. In all the countries the platform monitors, global companies invest in offices, industrial warehouses, and shopping centers. An example is Mexico's automotive and aerospace industries, which have thrived nationwide with the boost of FDI. Discover this and all SiiLA's solutions at siila.com.mx.