Decline in FDI was particularly evident in the automotive sector. Decline in FDI was particularly evident in the automotive sector.

Foreign investment dropped 19% last year

FDI was US $27 billion but Mexico ranked No. 2 in Latin America, behind Brazil

Foreign direct investment (FDI) in Mexico fell by 19% in 2016, according to the United Nations World Investment Report 2017, which was released yesterday.

ADVERTISEMENT

US $27 billion was invested in the country in 2016, down $6 billion on 2015 numbers. It resulted in a drop from 13th to 16th place in country rankings for FDI inflows.

The report mainly attributes the reduction to a decline in investment in the services sector and to a lesser extent manufacturing.

Automotive manufacturing was noted as being particularly affected.

However, Mexico was in second place for FDI in Latin America, only behind Brazil, which registered a decrease of 9% to $59 billion in 2016.

Better news for Mexico was that the report ranked it seventh among the top prospective host economies for 2017-19.

Chile, Bolivia and Peru also experienced downturns, contributing to an overall FDI decrease of 14% in Latin America and the Caribbean.

While the Organization for Economic Cooperation and Development (OECD) has downgraded its growth forecasts for Mexico from 2.3 to 1.9% for 2017 and from 2.4 to 2% for 2018, the long-term prospects are brighter.

Álvaro Pereira, an economics department director at the OECD, indicated that the only country in the world that could match Mexico for recent economic reforms was Portugal and that greater growth can be expected but will take time.

He added that there had been economic uncertainty in recent months and that reforms had added resilience to the Mexican economy and without them “the economy would be worse.”

Source: Milenio (sp)

Stories from our archives that you might enjoy

  • K. Chris C.

    Statistics can easily be made to lie. Governments are ALWAYS lying.

    So those government numbers propagandized about above?!

    An American citizen, not US subject.

  • csb4546

    Negotiate fair middle-class wages for Mexican manufacturing workers and watch foreign investment plummet further.
    The entire Mexican foreign manufacturing model is fatally flawed, the financial model completely dependent upon massive corporate tax breaks and multi-year slave wage agreements.
    Who benefits from these “deals”? It certainly isn’t Mexican workers.
    Slave wage labor for high-profit foreign manufacturing investment is not “success” for Mexicans – it’s exploitation.

    • jwd

      While I agree that if the Mexican employees made even half of their US counterparts, investments would tumble, a Mexican employee that makes a small percentage of what a US worker would make doing the same job is still better than the Mexican worker making nothing. I am not supporting the current trade imbalance between Mexico and the US, just making an observation about wages.

      • jwd

        Plus, the numbers in the article would have very little Trump effect since no one thought he would become President. All things being equal, 2017 may be worse! Mexico needs to increase the education of its people and stop corruption. They need to become customers of their own products and not be so dependent on the US.

  • WestCoastHwy

    As Mexico buys into it’s own country, these figures would naturally drop but this article doesn’t express that here. As the U.S.A. has saturated its work force (not including people that have dropped out) unemployment is at its lows which is not good, Mexico is in the same predicament. Economy is very dynamic and full of variable and this article doesn’t even scratch the surface.

FreeCurrencyRates.com
ADVERTISEMENT