Recent and upcoming investment in Mexico

COVID-19

The accelerated contagion of COVID-19 continued to worsen during August, with seven states now classified as red (highest alert) on the national epidemiological traffic light system and 17 states at orange, the second highest level of alert.  The country is currently reporting approximately 6,000 new cases per day nationwide, however this is down from over 20,000 per day earlier in the month.  Health Ministry authorities have reported that at least 17 states are beginning to register declines in the number of new cases, raising hopes that the third wave is beginning to ease.

ECONOMY AND INDUSTRY

  • Through the first six months of 2021, remittances to Mexico from abroad became the country’s single largest source of foreign currency, according to data from central bank Banco de México (Banxico). The US$23.6 billion in remittances during the period exceeded the value of other key income categories such as Foreign Direct Investment (FDI), petroleum exports and tourism. (La Jornada, August 18, 2021)
  • The Mexican Social Security Institute (IMSS) reported the number of formal jobs registered nationwide in the system reached a historic high in July. The number of part-time jobs declined, indicating that the recent reform to reduce the outsourcing of employment is driving companies to bring formerly independent workers on staff. (Reforma, August 13, 2021)
  • Income from international tourism in Mexico in June exceeded that of June 2019 by 4%, demonstrating significant recovery of Mexico’s tourism industry despite the ongoing pandemic, according to data from the National Statistics Institute (INEGI). The number of international tourists arriving in the country jumped 211% from June 2020, due to business shutdowns last year. (Citibanamex Reporte Económico Diario, August 11, 2021)

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Mexico’s 2024 succession battle taking shape

There was a lot at stake for Mexico in the June 6 mid-term election, about which much ink has been spilled here and abroad.  As it happened, the Mexican electorate failed to hand President Andrés Manuel López Obrador (AMLO) the super-majority needed for him to steamroll the opposition and take Mexico all the way back to his beloved 1970s.  Instead, we have now entered part two of the tug-of-war over the nationalization of the energy industry and the concentration of political power in the hands of one party, Mr. López Obrador’s National Regeneration Movement (Morena).  For those of us who do not share the president’s nostalgia for the glory days of the Soviet Union, the outcome of the June 6 election was something of a relief after a lengthy run-up of nail-biting, what-if-ing and generally fraught conjecture over a possible Morena landslide.  As our reward, we may now begin handicapping the selection process for Morena’s candidate to succeed the Dear Leader. Continue reading Mexico’s 2024 succession battle taking shape

Recent and upcoming investment in Mexico

COVID-19

During July the third wave of COVID-19 infections has accelerated in Mexico and the level of restrictions on mobility and business activities has increased.  One state returned to red, the highest level on the epidemiological traffic light system, and the number of states at the second highest level, orange, jumped from one to five.  The alert level in Mexico City continues to rise, going from green to yellow to orange since early June.  Nonetheless, the Health Ministry (Secretaría de Salud) has expressed reluctance to place strict restrictions on business and mobility in order to allow the economy to function.

ECONOMY AND INDUSTRY

  • Mexico’s exports of auto parts grew by an annualized rate of 22.5% through the first four months of this year, according to Economy Ministry data. Industry analysts cited increased regional content requirements under the new USMCA trade agreement as boosting exports to the United States and Canada. (El Financiero, July 19, 2021)
  • Same-store retail sales in June rose 14.4% with respect to the same month last year, the National Retailers Association (ANTAD) reported. Monthly year-on-year retail sales data continue to reflect the impact of store closings in 2020 due to the COVID-19 pandemic. (Citibanamex Reporte Económico Diario, July 13, 2021)
  • In May, a record number of visitors from the United States arrived by air in Mexico, according to the Anahuac Tourism Research Center (Cicotur). The 970,000 air passengers from the U.S. during the month exceeds the number for the same month in 2019, before the start of the COVID-19 pandemic. (Reforma, July 6, 2021)

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