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Ministry of Economy: FDI to Mexico fell 11.7% in 2020

The Ministry of Economy reported that FDI inflows to Mexico were for 29,079.4 million dollars in 2020.

The figure represents a decrease of 11.7% compared to the amount of 2019 previously reported.

On the one hand, in context, Mexico’s economy contracted 8.5% last year compared to 2019, reflecting the effects of the Covid-19 pandemic on the economy in general and including, in particular, an increase in unemployment and underemployment and lower consumer demand in the short term.

On the other hand, UNCTAD estimated that FDI arrivals contracted 42% in 2020.

“This shows that, compared to the rest of the world, Mexico had a better performance in attracting FDI in the most adverse year in recent economic history,” said the Ministry of Economy.

At the same time, FDI was financed mainly through reinvestment of profits, at 55.4%; followed by accounts between companies, at 22.6% and by new investments, at 22.0 percent.

Ministry of Economy

At an administrative level, the National Commission for Foreign Investments (CNIE), the General Directorate for Foreign Investment and the National Registry of Foreign Investments (RNIE) continue to be the main entities in charge of regulating and managing foreign investment.

All of them are attached to the Ministry of Economy.

The CNIE, made up of several State Secretariats, chaired by the head of the Ministry of Economy, is responsible for issuing policy guidelines on foreign investment, designing mechanisms to promote investment in Mexico and approving certain types of FDI, as well as as the terms and conditions of the participation of foreign investment in activities and acquisitions subject to specific regulation.

By economic sector, it is broken down into: manufacturing, with 40.6%; financial and insurance services, with 23.2%; transportation, with 9.8%; trade, with 7.7%; mining, with 4.6%; and mass media with 4.3 percent.

The remaining sectors captured 9.8 percent.

By country of origin, the Ministry of Economy highlighted, FDI flows came mainly from T-MEC partners at 53.6% (United States, 39.1% and Canada, 14.5%).

They was followed by Spain at 13.7%, Japan at 4.2 %, Germany 3.5% and other countries that contributed the remaining 25.0%.

 

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