South American Real Estate News

US investors withdrawing from Latin America’s three largest economies as populist rulers spark concern

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According to a recent report from the Department of the Treasury, investors from the United States are rapidly fleeing the once most promising and three largest countries of Latin America (Brazil, Mexico and Argentina).A total of US $ 16,393 million of US investments pulled out of Brazil, US $ 11,531 million left Mexico and US $ 6,106 have departed Argentina in February 2021, compared to the same month of 2020.

The peculiar ruling styles of Bolsonaro and López Obrador were major red flags to investors, analysts said

But in relative terms, it means 25% of the US investments in Argentina chose to leave, as did 10% of the capital invested in Brazil and only 7% of what had been placed in Mexico chose to seek other destinations.

Most of the “swallow capitals”, as they are called in Latin America, correspond to government bonds and corporate securities. According to the official report, Mexican stocks, bonds, and corporate securities in the hands of US capitalists totalled 152,802 million dollars. In the case of Mexico, 3% of the flows correspond to corporate bonds and 9% to government papers.

Analyst agrees that the peculiar ruling styles of Brazil’s Jair Bolsonaro and Mexico’s Andrés López Obrador, who are regarded as qualified as “populist” or even “extremist” are other elements that often scare American capitalists.

The same applied to Russia’s Vladimir Putin. Not surprisingly, Russia placed fourth in the withdrawal report followed by Hong Kong and the Bahamas.

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