Unlike past economic cycles driven by consumer spending, Latin America's next growth phase will likely be fueled by capital expenditures (CAPEX) in infrastructure, AI, and factories, spurred by favorable global and local factors.
Three concurrent forces—shifting global supply chains, peaking interest rates, and pro-investment political shifts—are creating a rare CAPEX-led growth cycle in Latin America, moving it beyond its traditional consumer-driven model.
A key driver for Latin American equities will be the reallocation of its own vast domestic capital. Even a minor shift from the region's 90-95% fixed-income allocation could profoundly deepen local equity markets, independent of foreign investment.