Weekly Report - 30 August 2012 (WR-12-34)

MEXICO | Lower FDI. Mexico attracted US$9.62bn in foreign direct investment (FDI) in the first half of 2012, 9.2% less than in the same period of last year, reports the economy ministry (SE). The result is somewhat surprising given analysts’ general bullishness on Mexico of late. To the delight of the Mexican government, a string of economic agencies have singled out the country as an increasingly attractive destination for FDI thanks to its positive economic outlook and its successful recovery from the global economic crisis in 2009. According to SE data, most of the first half FDI (49.1%) was made of profits reinvestments, while new investments accounted for 31.1% of the total. In fact new investments were down 11.1% year-on-year compared to 2011. The SE pointed out that the figures are preliminary and subject to revision later in the year. More encouragingly, according to the data the manufacturing sector is attracting the most investment, taking 38.6% of the total in the period. This was followed by financial services (22.6%), construction (11.7%), retail (9.8%) and real estate (5.0%). In 2011 Mexico FDI inflows were worth US$20.4bn and the country will do well to match that figure this year. According to the SE, since the onset of the global crisis in 2008 Mexico has received US$126.2bn in total FDI, regaining its position as the 17^th largest recipient of FDI in the ranking compiled by the United Nations Conference on Trade and Development (UNCTAD). Mexico reached number 17 back in 2007, when it received 1.6% of global FDI, but thereafter its share of global FDI fell off, and it fell down the UNCTAD list to number 22. According to latest UNCTAD figures, Mexico’s global share of FDI in 2011 was 1.3%, so the country still has some way to in order before FDI inflows recover to pre-crisis levels.

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