In memory of my brother, FJPM (RIP).
Between June 30 and July 31, the following were publicly announced: 23 new investment projects in Mexico, with an approximate amount of 2,571 million dollars, according to the monthly monitoring carried out by the Ministry of Economy.
The July announcements add to the 143 FDI projects reported between January 1 and June 30, which totaled US$45.464 billion.
So, so far this year, Private companies from abroad have made 166 public investment announcements in Mexico, mainly linked to the phenomenon of relocation or nearshoring.
The above assumes Foreign investments of 48 thousand 35 million dollars on a multi-year basis, which could enter the country in the next two or three years.
The magnitude of this foreign investment is also reflected in the expected creation of jobs, with the projection of approximately 75 thousand new direct jobs, of which 42 percent are concentrated in the automotive industry.
The federal agency’s update found that this year, 46 percent of public investment announcements came from the United States, 14 percent from Germany and 9 percent from Argentina.
He 53 percent of these ads It is related to the manufacturing sector, 14 percent with commerce, 11 percent with transportation, 10 percent with mass media and 7 percent with construction.
According to the Economy report, Querétaro is the entity most likely to receive are investments, with 14 percent of the total; followed by the State of Mexico, with 10 percent; Nuevo León, with 9 percent; and Puebla, with 6 percent.
He nearshoring increasingly shows the potential economic benefit it will have in terms of growth for the country in the coming years.
If these investments and others additional to those already expected in the remainder of the year are achieved, the question is: How much growth could the Mexican economy achieve? in GDP in 2025 and later years.
ECLAC estimates that in 2025, the GDP of Mexico will grow 1.4 percent Due mainly to the economic slowdown in the US and the uncertainty of the international environment.
The UN regional body’s forecast for next year is even marginally below analysts’ expectations of around 1.5 percent.
In his Economic Survey of Latin America and the Caribbean 2024ECLAC warns that “the relocation of companies and investments from other countries to Mexico due to its proximity to the US (nearshoring) and the certainty given to investment are among the factors that will attract FDI in the short and medium term.”
Indeed, if Mexico is among the main recipient countries of FDI, it is due to its geographical location and its qualified and low-cost labor force, factors that represent competitive advantages.
But to speed up the investment decisions of companies that consider the country as their next destination, It is necessary to face the challenges in infrastructure of electricity, water and gas, as well as in governance to generate certainty in terms of the rule of law and public safety, among others.
A recent study by Bain & Company warns that Mexico must address challenges key in infrastructure, electricity supply, water supply, security and specialized talent in sectors of high growth like cars and electrical equipment to maximize the benefits of nearshoring.
The analysis of the global consulting firm shows that if Mexico partially resolves its main bottleneckshe value of exportss could increase significantly in the coming years.
But if the challenges blocking the entire process are fully resolved, potential of nearshoring200 billion dollars could be raised, in addition to the 300 billion invested by foreign companies in the country.
According to Bain & Company, “Failure to address these challenges could leave the country behind against its Asian competitors,” as Vietnam, Thailand and Indiawhich have captured larger shares of U.S. trade.
