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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

Mexico has suffered something of a setback in its emergence from the COVID-19 pandemic over the past month.  On the epidemiological traffic light system, Mexico City had reached green, or mild restrictions, as the beginning of the month only to return to the higher restrictions of the yellow level following the June 6 national elections.  The number of states at the orange or significant restriction level rose from one to five during the month, with reported increases in COVID cases particularly in tourist zones such as the Riviera Maya (Cancun), Yucatan and Baja California.  No PCR test or quarantine is required to enter Mexico for travelers arriving by air.

ECONOMY AND INDUSTRY

  • Same-store retail sales jumped 33.9% in May with respect to the same month last year, the National Retailers Association (ANTAD) reported. The size of the increase is due largely to the plunge in sales in May 2020 resulting from the initial COVID-19 lockdowns. (Reforma, June 11, 2021)
  • Mexico’s central bank Banco de México (Banxico) raised its projection of GDP growth to 6.0% for the current year, up from a previous estimate of 4.8%. The improved outlook is based on advances in COVID-19 vaccination, strong demand for exports and better than expected first quarter growth. (Citibanamex Reporte Económico Diario, June 3, 2021)
  • Remittances to Mexico from abroad through the first four months of the year are running 19.1% ahead of the same period last year, central bank Banco de México (Banxico) reported. Remittances are on track to post their strongest annual growth since 2005. (Milenio, June 1, 2021)

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