Mexico, Peru, Colombia, Brazil, Chile and
Argentina. Since 2018, every major country in Latin
America has shifted to the left. This regional trend
towards socialism, often called a pink tide is driven
by widening inequality and is leading to more capital flying
out of the region across Latin America, we'll see
an increasingly middle class investor are looking for a plan
B in case of more economic and political upheaval.
Initial data from the Institute of International Finance shows a
capital outflow of$137 billion from the five largest economies
in the region last year. That's 41% higher than
the 2021 figure and the most since 2010. Although
no one tracks where the money is going. Popular
destinations include the Dominican Republic, Panama, Spain and
the US. Mexican investors have spent more than$774
million on Spanish real estate and construction since 2020 and
Colombians have bought as many as 500 Panamanian properties in
just the past few months, but no place has
felt the impact more than Miami. The city's history
and development are so interwoven with its neighbors to the
South that it's often referred to as the capital of
Latin America. Colombians alone bought 1000 222 properties in
the Miami area last year, marking a 30% increase
from the previous year. Meanwhile, about 40% of
Chile's nearly 200 family offices have a foothold in the
US. Primarily in South Florida. Each is investing
30 to$40 million a year state side mostly in
real estate. But while places like Miami might be
reaping the benefits of this increasing investment. Capital flight
poses important challenges for Latin American economies. On the
one hand, as money flows out of these countries
, their currencies weaken which means more inflation pressures,
that of course means further hardship for the population which
is already suffering the consequences of a jump in consumer
prices. And capital flight can also mean less investment
. That money that could have been used to expand
the factory, for example, or buy real estate
in these countries is instead leaving less investment over time
, has huge consequences on the economic growth potential for
these economies.