LatAm Private Capital, October 2026: What’s Moving Investors and How Costa Rica Can Benefit

October 12, 2026

Three forces are moving private capital in Latin America this month: a Brazilian election that just beat the polls, a Federal Reserve that is tightening rather than easing, and a USMCA that is now in rolling review. Each is a regional headline. Together they make a real case for Costa Rica, and a few reasons to be careful about how that case gets told.

What’s Moving Private Investors (as of Monday, October 12)

Brazil’s runoff is the region’s biggest binary. In the October 4 first round, Flávio Bolsonaro edged President Lula, roughly 47% to 45% of valid votes, against polls that had Lula ahead by about three points. The Ibovespa jumped 7.7% the next day to a record close near 206,900 (its first above 200,000), the real firmed to about 4.98 per dollar, and at least one Wall Street bank moved Brazilian equities to overweight. The runoff is October 25. Worth remembering: a similar first-round surprise for the Bolsonaro camp four years ago did not survive the runoff.
The Fed is raising, not cutting. The committee lifted rates 25 bps on September 16 to 3.75%–4.00%, and the minutes released October 7 show every participant backed it. The dollar index was near 102.3 that day, and the next decision is October 28. Higher US rates are the classic headwind for emerging-market currencies and dollar-indebted borrowers.
North American trade rules are in limbo. At the July 1 joint review, the US declined to renew USMCA in its current form, which triggers annual reviews. The agreement stays in force until July 2036 and US–Mexico bilateral talks continue, but CSIS analysts expect many companies to simply put investment plans on hold. Mexico still logged roughly $23.6 billion of FDI in Q1 on preliminary data.
Energy and geopolitics remain the wild card. The Iran conflict that began February 28 pushed Brent above $100 for long stretches, and ceasefires have come and gone since. We are not quoting a spot price here because it moves too fast to be useful; treat energy as a live variable in any underwriting.
Regional equities are a 2026 winner, with strings attached. MSCI EM Latin America was up more than 20% this year in one recent roundup, and Merrill’s June 29 outlook flagged the region’s resurgence while noting how closely returns track commodity prices.

Why This Helps Costa Rica

Costa Rica is not part of the USMCA review, is not a commodity exporter, and has no presidential runoff on the calendar. That does not make it immune. Moody’s cited a 15% US tariff when it upgraded the country in 2025, and Allianz Trade expects tariff hikes to dampen export growth and FDI. But it does make Costa Rica a relatively calm destination for capital that wants Latin America exposure without a binary event attached. The latest numbers back that up.

The underlying FDI trend is strong. Excluding the Heineken–Fifco deal (about $3.25 billion), FDI rose 23.4% in the first half of 2026 to $2.74 billion; including it, the half-year total was $5.94 billion. Manufacturing contributed $1.95 billion (+9.8%), free-trade-zone companies $1.74 billion (+35%), and the US supplied 68.9% of the total.
It is spreading beyond San José. Procomer reports double-digit growth in investment outside the Greater Metropolitan Area, and agricultural FDI swung from slightly negative a year ago to $48.8 million.
The pipeline is deep. 2025 was the second straight year above $5 billion ($5.12 billion), with reinvestments up 26% to $4.33 billion. More than 1,000 foreign-investor companies now employ about 312,000 people, and CINDE logged 19 new projects and 48 reinvestments in 2025. At September’s Costa Rica Trade & Investment Summit, 400+ buyers and investors from 40+ countries held more than 3,600 meetings.
Credit and growth support the story. Moody’s affirmed Ba2 (stable) in March, and Janus Henderson argued after February’s election that the country is on a "rising star" path toward investment grade. The World Bank sees growth of 3.5% in 2026 and 3.6%–3.7% in 2027–28.

Where the Story Is Weaker

Tourism FDI fell 27% in the first half, from $215.0 million to $157.9 million, even as manufacturing and free zones grew.
Free-zone inflows were uneven. Q1 was the weakest quarter since early 2025 at about $842 million; the half-year total implies a stronger second quarter of roughly $0.9 billion (our arithmetic from preliminary figures).
The strong colón cuts both ways. It holds down import costs but weighs on dollar-paid exporters and makes the country pricier for visitors.
US concentration. With about 69% of inflows from one country, US tariff policy matters more to Costa Rica’s FDI story than any single sector does.

Investor Read-Through

Read the composition, not the headline. The $5.94 billion half-year figure is dominated by one acquisition. The $2.74 billion ex-Fifco number is the better guide to repeatable investor appetite.
Underwrite in dollars and stress the colón. With US rates rising, a stronger dollar can still move local currencies even in a stable market, as our June briefing showed.
Mark the calendar: Brazil’s runoff (October 25), the Fed decision (October 28), the next USMCA annual review milestones, and Procomer’s next quarterly FDI release.
Real estate angle (our read, not a forecast): inflows tilting toward manufacturing and free zones rather than tourism suggest demand near industrial and logistics hubs may be firmer than resort-led demand in the near term. Diligence each submarket on its own numbers.

Data as of October 12, 2026. Figures marked preliminary will be revised. This is general market commentary, not investment advice.