- Natural Resources Supporting Post-Carbon Economy May Attract Investors – Several Latin American countries possess rich deposits of fossil fuels and strategic minerals, including copper and lithium, that support a necessary global transition to a zero-carbon energy system and the associated post-carbon economy. If these countries can define and apply standards for socially and environmentally responsible mineral production, the region may secure a commercial advantage for these minerals and attract greater foreign investment.
- Strong U.S. Dollar May Lead to Weaker Currencies in Region – The expectation of a further strengthening of the U.S. dollar, combined with global recession risks, could contribute to weaker currencies in the region. The Mexican peso and the Brazilian real, which have recorded gains against the dollar this year, could be the exceptions.
- Consumer Demand Could Buoy Fintech/Financial Services Sectors – Latin America has thriving fintech and financial services sectors; the number of fintech platforms grew by 112% from 2018 through 2021, according to a study published by the Inter-American Development Bank, IDB Invest, and Finnovista. This growth is expected to continue in 2023 due to strong consumer demand for mobile payment options and new, sophisticated fintech business models starting operations in more markets.
- Opportunities for Engineering, Construction Firms to Build Infrastructure – Even with an expected mild slowdown in economic activity next year, the region still lacks adequate infrastructure of all forms, including roads, airports, seaports, energy, and telecommunications. The Inter-American Development Bank estimates there is an infrastructure gap of about 2.5% of the region’s gross domestic product. This scenario presents considerable opportunities for project finance growth, with engineering, construction and specialized sub-contracting firms seeking to enter the Latin American market to fill the infrastructure void.
- Political Unrest Could Slow Foreign Investment – During the past few years, citizens in several countries expressed their dissatisfaction with their governments by taking action at the polls or by protesting in the streets. Continued social and political unrest in the region may slow foreign investors’ appetite to enter Latin America and could accelerate capital outflows to the United States, Europe, and other jurisdictions if less free-market friendly governmental policies are expected.
About the Authors
Greenberg Traurig’s award-winning Latin America Practice draws on resources from our offices in Chicago, Houston, Los Angeles, Mexico City, Miami, New York, Washington D.C., and elsewhere around the world, bringing together a multidisciplinary team of more than 120 lawyers to help clients identify and capitalize on business opportunities in Latin America, the Iberian Peninsula, and the Caribbean. As the only global law firm founded in Miami, Greenberg Traurig is inextricably linked to Latin America. Since its beginning, Greenberg Traurig has represented many of the family enterprises that are today among Latin America’s largest companies. By addressing real-world problems for clients on a regular basis, our team has developed a breadth of experience that sets us apart.