Latin America and the Caribbean attracted more foreign direct investment in 2025 than in the previous year, even as indicators of future productive investment weakened, according to UN Trade and Development (UNCTAD). The findings, released in the World Investment Report 2026, show FDI inflows to the region, excluding Caribbean offshore financial centres, rose 14% to $188 billion. That figure represented roughly one fifth of all FDI flows to developing economies. The increase was driven largely by South America, particularly Brazil. Yet beneath the stronger headline numbers lies a more complex story of concentration and a shrinking pipeline of new productive projects.
The rebound was highly concentrated across a small group of economies. The top 10 recipient economies accounted for 95% of all FDI inflows in Latin America and the Caribbean in 2025. Brazil and Mexico together accounted for roughly two thirds of total regional inflows. Investment linked to commodities and sectors supporting the energy transition continued to attract investor interest. The strongest inflows were tied to large markets and economies integrated into major trade and production networks.
Brazil was the largest contributor to regional growth, with inflows increasing from $63 billion to $77 billion, placing it among the world’s five largest recipients of foreign investment. Mexico also remained one of the region’s leading destinations, with inflows rising from about $38 billion to $41 billion. Its position was supported by its role in regional production networks and continued investment in services and manufacturing. These figures point to continued investor confidence in the region’s largest markets. They also highlight that rising regional inflows do not automatically translate into broad-based gains across countries or sectors.
The clearest warning signal comes from greenfield investment, often regarded as one of the best indicators of future productive activity. While overall inflows increased, the value of announced greenfield projects fell by about one-third, dropping to less than $120 billion. Manufacturing and logistics were among the sectors registering declines. The decline was particularly pronounced in Mexico, where announced greenfield values fell from $44 billion to $24 billion, as firms postponed or scaled back projects amid trade and industrial policy uncertainty. Argentina also saw a sharp fall, from about $37 billion to $1.4 billion.
The report points to the need for policies that convert investor interest into bankable productive projects. For Latin America and the Caribbean, this means strengthening investment facilitation and aftercare, improving logistics and energy infrastructure, supporting supplier development, and using regional integration to connect smaller economies to larger markets and value chains. Countries rich in minerals or renewable-energy potential also need strategies that encourage local value addition rather than relying only on commodity-linked inflows. The region continues to offer advantages including abundant natural resources, growing renewable-energy potential, large consumer markets and strategic proximity to major trading partners. In 2025, more capital entered the region, but less was committed to building new productive assets.
