Category Archives: Economy

Recent and upcoming investment in Mexico

ECONOMY AND INDUSTRY

  • Canadian rail operator Canadian Pacific Railway reached agreement to acquire U.S.-owned carrier Kansas City Southern in a widely reported deal. The acquisition will create the first direct freight railway linking the three members of the USMCA North American free trade zone. (Reuters, September 15, 2021)
  • The Mexican subsidiary of Spanish bank BBVA raised its growth projection for the Mexican construction industry to 9% in 2021. BBVA Mexico’s head economist underscored however that the strong growth comes with respect to the sharp downturn in 2020 and should not be interpreted as full recovery for the sector. (Milenio, September 13, 2021)
  • Mexico became the world’s eighth largest exporter of food and agriculture products in 2020, the World Trade Organization reported. The country’s US$41 billion in agri-food exports were led by products such as beer, avocados, tequila, tomatoes and peppers. (El Economista, September 2, 2021). (La Jornada, August 18, 2021)

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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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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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