Foreign direct investment in Mexico will increase 8% in 2024, according to a forecast by the Mexican Business Council for Foreign Trade, Investment and Technology (COMCE).

Just over US $36 billion in FDI flowed into Mexico last year, a record high.

COMCE, a Mexico City-based private sector organization, predicted on Thursday that FDI will increase to US $39 billion this year.

“This [projected] flow of capital underscores the confidence … of international investors in the economic potential and stability of Mexico, especially within the framework of [company] relocation,” the council said in a statement.

Mexico — the world’s ninth-largest recipient of FDI in 2023 — is already well on its way to achieving the foreign investment level forecast by COMCE.

In the first quarter of 2024, FDI hit a record high of $20.31 billion, according to preliminary Economy Ministry data. The Q1 result is equivalent to 59% of last year’s total.

Seeking to calm concerns over a proposed judicial reform that will be considered by Congress later this year, President-elect Claudia Sheinbaum said last month that investors in Mexico have “nothing to worry about.”

Export revenue also forecast to rise 

COMCE also predicted that the value of Mexico’s exports will increase to US $610 billion in 2024. That would be an increase of almost 3% compared to the $593 billion in export revenue Mexico earned last year.

“This [projected] significant increase in exports is due to the dynamism of the manufacturing sector, mainly the automotive and auto parts industry,” COMCE said.

Mexico is already the top exporter to the United States, and the world’s ninth biggest exporter overall.

In the first five months of the year, Mexico’s exports were worth $250.51 billion, according to national statistics agency INEGI. Over 80% of that revenue came from exports to the United States. U.S. data published this week showed that Mexico shipped products worth $206.79 billion to the U.S. in the first five months of the year, a record for the period.

In 2023, Mexico dethroned China as the top exporter to the United States. Mexico has benefited from a “decoupling” of the world’s two largest economies amid the ongoing China-United States trade war, as well as the relocation of foreign companies to Mexico as part of the nearshoring trend.

COMCE executive vice president Sergio Contreras said Thursday that “we’re witnessing a historic moment for Mexico in the realm of trade and international investment thanks to nearshoring.”

Contreras added that Mexico’s rise in global economic rankings is “a clear sign of the importance of the country as an exporting power and destination for FDI.”

Foreign direct investment in Mexico is expected to continue increasing in the coming years as companies act on investment announcements they have already made.

Beyond the rise in global FDI and export rankings, another sign of the growing importance of Mexico in the global economy is that in 2023, it became the world’s 12th largest economy, according to the International Monetary Fund.

With reports from El Economista and La Jornada