Foreign direct investment between Latin America and Spain

Rationale This article describes the main features of foreign direct investment (FDI) into and out of Latin America and the Caribbean (LAC), with a special focus on flows to and from Spain. According to the latest available data for 2023, Spain is the second largest investor in the region, after the United States, and LAC FDI in Spain is also significant of late. Takeaways •FDI received and originated by LAC has increased its relative share in global FDI flows since the 1990s, but it has been heavily influenced by cyclical fluctuations in the Latin American economies and by commodity prices. •The European Union ranks first as the geographical origin of the stock of FDI in LAC, with Spain in a prominent position (15% of the total). LAC accounts for over 30% of the stock of FDI by Spain, which is concentrated in the region’s two largest economies: Brazil and Mexico. By sector, services accounts for the bulk of investment. •FDI from LAC into Spain is sizeable, as it accounts for close to 8% of the stock of inbound FDI, most notably from Mexico, which represents nearly half of the region’s FDI in Spain.