Sunday, May 26, 2024

Foreign direct investment up 7.8% in first 9 months to US $26 billion

Preliminary figures for foreign direct investment (FDI) show a 7.8% increase in the first nine months of 2019 compared to the same period last year to reach its second highest level ever, the Economy Secretariat (SE) reported on Tuesday.

Data shows that Mexico received US $26.05 billion in FDI between January and September.

The figure is the second highest for the first nine-month period after 2013 when the purchase of brewer Grupo Modelo by Belgian multinational Anheuser-Busch InBev gave a significant boost to foreign investment numbers.

It will almost certainly be revised upward once companies have formally reported all foreign investment in the period to the SE.

Economy Secretary Graciela Márquez said the Trans-Pacific trade pact known as TPP11, which took effect on December 30, and higher investment in the energy sector were factors in the FDI increase in the first nine months.

Energy investment included $580 million for the extraction of oil and gas as well as additional resources to carry out projects related to the upgrade of Mexico’s refineries.

The manufacturing sector captured $11.63 billion in FDI between January and September – 44.6% of the total – an increase of 4.8% compared to last year. About $5 billion went to the automotive industry.

The financial services and insurance sector captured 13.9% of FDI; 11.9% came via trade; 5.8% went to the energy, water and gas industries; 5.3% was invested in media companies; and 5.2% was directed to mining.

Márquez said that investment in mining has fallen due to insecurity but added that the federal government is taking action in order to provide guarantees and greater certainty to companies operating in the sector.

The United States was the biggest foreign investor in Mexico, contributing 34.9% of total FDI between January and September.

Spain, Canada, Germany and Italy followed, providing 15.5%, 10.4%, 10.1% and 4.1% of foreign investment respectively.

Reinvestment of profits provided 55.2% of FDI, 36.1% came through new investments and 8.7% was sourced via payments to Mexican companies by foreign enterprises.

Source: El Economista (sp) 

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