Bureaucracy and distrust threaten regional investment for 2027

Legal uncertainty, bureaucracy and difficulties in consultations with local communities are emerging as the main factors that could slow investment in Latin America through 2027. According to a report published by Bloomberg Línea on September 30, 2026, several legal advisers at the international law firm Pérez-Llorca said these institutional weaknesses are eroding investor confidence in large economies such as Mexico, Colombia and Peru.

Public distrust compounds this picture. According to OECD data cited by the law firm, only 35% of the Latin American population reports high or moderate confidence in its national governments. This institutional weakness hampers the legitimacy and execution of long-term infrastructure and development projects, since mid-course changes in administrative criteria and poorly documented community consultations often lead to legal disputes between companies and states.

This situation coincides with a period of greater selectivity by global capital. According to data from TTR Data reported by Bloomberg Línea, Latin America and the Caribbean received 194,233 million dollars in foreign direct investment (FDI) (the inflow of external capital to create companies or acquire local assets) in 2025, a slight increase of 1.7% from the previous year. However, newly announced projects suffered a significant contraction: their number fell 10.2%, while their monetary value shrank 34.3%, to 114,100 million dollars.

The slowdown in project announcements widens the region's development gap. A study by the Inter-American Development Bank (IDB) estimates that Latin America and the Caribbean will need 1.6 trillion dollars in infrastructure investment between 2025 and 2030, equivalent to about 266,000 million dollars a year. This requirement contrasts sharply with the region's historical reality, where effective investment averaged just 1.7% of GDP between 2015 and 2023. Likewise, according to Infobae América, IDB President Ilan Goldfajn warned that closing the deficit in regional mobility works alone requires allocating 1.3% of GDP annually, facing a specific transport gap of 630,000 million dollars.

Going forward, the flow of capital into the region will depend not only on the availability of global resources but also on the ability of countries to offer stable and modern regulatory frameworks. Regulatory predictability and efficient social management of projects will be decisive in turning funds into concrete works rather than leaving them stalled in the planning stages.