HE GOVERNMENT OF THE 4T enthusiastically announced that in the first quarter of the year a was recorded record number of 20 thousand 300 million dollars in Foreign Direct Investment (FDI).
But closer scrutiny reveals that this supposed achievement is nothing to shout about, as was at first apparent from the tone of the announcement.
The Ministry of Economy He reported that 97% of FDI came from reinvestment of profits from foreign companies already established in Mexicowhile only 3% corresponded to new investments.
The people of Raquel Buenrostro attribute this increase in reinvestment of profits to the economic stability of the country and the good environment of business.
However, it is important to question why the carloads of new investments of companies who should be settling in the country, as they tell us about the famous nearshoring.
While reinvestment of profits can be an indicator of foreign investor confidence, it can also be a sign that foreign companies are not investing in new operations or the expansion of existing ones.
Furthermore, although USA continues to be the main generator of FDI to Mexico, followed by Germany, Canada and Japanit is important to ask if this investment is diversified in terms of sectors and regions.
Is FDI driving growth in all regions of Mexico and in a variety of sectors, or is it concentrated in a few areas?
He President Andrés Manuel López Obrador has highlighted the progress of the investment in the period, stating that it will contribute to a greater generation of employment and to raise incomes for workers from different regions.
However, it is crucial to analyze whether these benefits are materializing and whether they are reaching the regions and workers who need them most.
Finally, although some analysts predict that the process of company relocation or nearshoring could double FDI and raise the growth of the Mexican economy to levels greater than 5% in the coming years, we must be cautious with these predictions.
Although the increase in FDI is positive news for Mexico, it is crucial to look beyond the numbers and ask if this investment is really benefiting the Mexican economy in the long term.
THE ASSOCIATION OF Real Estate Developers (ADI), chaired by Jaime Fasja, announced an investment of 14.5 billion dollars in the Mexican real estate sector by 2024, regardless of the outcome of the elections. However, it is important that this capital is not only concentrated in CDMX, but is distributed equitably to promote sustainable and accessible urban development throughout the national territory. This investment must translate into quality infrastructure and affordable housing solutions, benefiting a wide range of the population and not just privileged sectors.
THE POSSIBLE BANKRUPTCY of Red Lobster in the United States, although it does not have a direct impact on its operations in Mexico, reflects the challenges facing the restaurant industry in times of economic uncertainty. Mexican Restaurant Corporation, chaired by Joaquín Vargas, the company that manages the brand in Mexico, is in a complex context, with growing net losses and a significant decrease in the value of its shares. This situation shows the need for a solid and adaptive strategy to survive in a volatile and competitive market.
ALTHOUGH ECONOMISTS at Grupo Financiero Bx+ offer some optimism about Mexico’s credit rating, Moody’s warnings about fiscal weakness should not be underestimated. Deficit reduction is a major challenge, and increased social spending could add additional pressure to public finances. Although the rating agencies still maintain the investment grade, the government’s ability to implement effective fiscal consolidation measures will be crucial to maintaining this credit position in the future.
THE downward revision of economic growth by Monex reflects concern about the slowdown amid high interest rates. Although the strength of domestic demand and the economic performance of the United States is highlighted, the growth estimate for 2025 shows a downward trend, evidencing the structural challenges facing the Mexican economy. On the other hand, the expectation of consecutive interest rate cuts by the Bank of Mexico reflects caution in the face of inflationary pressures and the need for gradual monetary normalization.
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