If Foreign Direct Investment (FDI) is any measure of confidence in a country’s potential, Mexico is in good shape.
Foreign investment during the first six months of the year was US $14.385 billion, up 4.6% over the same period in 2015, according to information provided by the Economy Secretariat.
The figure is in line with the government’s objective of $30 billion annually.
It is also in line with expectations for $25 billion this year by Barclays México, said chief economist Marco Oviedo, who said conditions worldwide would suggest higher FDI than predicted for the remainder of the year.
Higher numbers depend on an acceleration in manufacturing activity in the United States, he said. U.S. elections could generate some uncertainty for investors but there has been no indication of that yet.
The elections’ “protectionist theme” could have an effect but will not likely be a factor this year, Oviedo said.
Manufacturing has attracted 62.4% of investments between January and June, financial services 11.5%, transportation and warehousing 5.2%, mining 4.4% and trade 4.2%. Thirty-five per cent of investors were from the U.S., 14% were from Israel, 12.9% from Spain, 7.6% from Germany and 5.9% from Canada.
Mexico City was the chief destination for investors’ funds, attracting $3.33 billion, followed by Nuevo León which received $1.74 billion, Jalisco $1.569 billion, State of México $1.19 billion and Baja California, $775 million.
Manuel Díaz of customs brokerage GrupoEi said FDI figures show that there is a perception that the federal administration’s structural reforms outweigh any impact created by a climate of insecurity or a negative image for the rule of law as a result of blockades by the dissident teachers’ union, the CNTE.
Nor have the United Kingdom’s vote to leave the European Union or the U.S. elections had any effect on FDI growth, Díaz said.
A foreign investor is not going to put his money where he feels there is risk, he observed. “FDI is the best thermometer to show there is confidence in the country.”
Source: El Financiero (sp)