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Mexico sees foreign investment rise to $18.4 bln in H1 2021

posted onAugust 18, 2021

Foreign direct investment (FDI) in Mexico stood at $18.4 billion in the first half of this year, up 2.6% compared with the same period in 2020, according to the Mexican Economy Ministry. Manufacturing, mining, financial services and insurance emerged as the top sectors. 

The U.S. has been leading the list of investor countries to invest in Mexico with about 51% of the total FDI inflows during the first six months of the year, while 9.1% came from Spain. The United Kingdom, Germany and Luxembourg  were also major sources of FDI in Mexico during the period. 

According to the country’s Secretary of Economy Tatiana Clouther who spoke at a videoconference on May 20, FDI in the first three months of this year had reached their highest level for a similar time period since figures began to be recorded in 1999. 

Clouther also stated that trade facilitated by the US-Mexico-Canada Agreement (USMCA) was crucial to the country achieving such results in spite of the Covid-19 crisis.

FDI in Mexico is one of the highest among countries in Latin America. According to BANXICO and the Ministry of Economy, during the period 2010-2020, FDI in Mexico presented a growth of 2.3%, going from $27.14 billion in 2010 to $27.78 billion in 2020.

The United Nations Conference on Trade and Development (UNCTAD) in its World Investment Report estimated that in 2020 global FDI flows decreased 42%, compared to 2019. However, Mexico had a better performance attracting FDI compared to the rest of the world. 

The country is particularly attractive to foreign investors in part because of its strategic location bordering the United States and the presence of major ports serving both the Atlantic and Pacific Oceans. 

The latest figures for FDI in Mexico are a sign of the coming economic recovery following a year of global economic turmoil when the Mexican economy contracted 8.3%.

“Although FDI alone does not solve the problems related to economic growth, it can assume an important role to the extent that it is aligned with their strategic objectives,” ECLAC says in its “Foreign Direct Investment in Latin America and Caribbean” report.

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