BBVA's Investment Outlook in Latin America: From Commodities to Green Hydrogen
Key Ideas
- Latin America offers investment opportunities beyond traditional markets, focusing on commodities, clean energy, and green hydrogen.
- The region attracted significant foreign direct investment in 2024, with potential for more growth by aligning FDI attraction policies with productive development.
- Strategic commodities, including metals for the energy transition, are key sectors in Latin America, while the region's clean energy matrix and green hydrogen projects offer a competitive advantage.
- Analysts predict a preference for local currency assets in Latin American countries, influenced by the global weakness of the US dollar.
Juan Ruiz, chief economist at BBVA Research in Latin America, highlighted three strategic investment areas in the region: domestic demand, commodities, and clean energy, with a focus on green hydrogen. Latin America saw a 7.1% increase in foreign direct investment (FDI) in 2024, with countries like Brazil and Mexico being top recipients. The region aims to improve FDI attraction policies to enhance its impact on host economies. Ruiz emphasized the importance of strategic commodities, particularly metals for the energy transition, and the region's potential in clean energy exports, such as green hydrogen projects. He also discussed external risks, including US economic policy uncertainty and inflation resurgence. Analysts suggest a preference for local currency assets in Latin America due to the weakening US dollar.
Topics
South America
Clean Energy
Investment
Economic Development
Commodities
Foreign Direct Investment
Currency Strength
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