Mexico captured 24,831.7 million dollars of Foreign Direct Investment (FDI) flows from January to September 2021 in preliminary figures, a year-on-year increase of 5.7%, the Ministry of Economy reported.

"The foregoing shows a recovery in FDI flows, in accordance with the positive global trend, according to the latest data from the United Nations Conference on Trade and Development (UNCTAD)," the Ministry of Economy said in a statement.

For similar periods, this is the third highest amount considering online registrations, since 1999, surpassed by the levels of 2013 and 2019, with 28,200 million dollars and 26,100 million dollars, respectively.

Considering 3Q 2021, FDI arrivals to Mexico were $ 5.446 million, of which $ 3.539 million corresponded to new investments; 333 million, to reinvestments, and 1,574 million, to intercompany accounts.

The total figure compares with the collapse of 1.279 million in the same period of 2020, already updated.

Globally, the increase in FDI flows in the first two quarters of 2021 recovered more than 70% of the loss induced by the Covid-19 pandemic in 2020.

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According to UNCTAD, these flows in the first half of the current year reached an estimated 852 billion dollars, showing a stronger than expected recovery momentum.

More broadly, the Organization for Economic Cooperation and Development (OECD) released an updated forecast in September 2021, which estimated that global economic growth had slowed by 3.4% in 2020, but also projected that the world economy would grow at an annual rate of 5.7% in 2021 and 4.5% in 2022, assuming continued strong support from macroeconomic policies and accommodative monetary policies.

In Mexico, the preliminary FDI registered for January-September 2021 came from 3,259 companies with participation of foreign capital, 3,721 trust contracts and 23 foreign legal entities.

By type of investment or origin of financing, the capture of FDI through reinvestment of profits reached 40.3%, followed by new investments with 38.4% and by accounts between companies 21.3%.

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By sector, manufacturing had a coverage of 45.0%, ahead of mining (14.0%); financial and insurance services (10.9%); transportation (10.0%); commerce (6.0%) and temporary accommodation services (4.6%). The remaining sectors captured 9.5 percent.

And as for the country of origin, the United States reached 49.6%, followed by Spain (10.7%), Japan (6.3%), Germany (5.3%) and Canada (5.2%); other countries contributed the remaining 22.9%.

In contrast to the positive performance of FDI, among the largest economies in Latin America, Mexico is by far the furthest behind in the reactivation of private investment after the critical phase of the economic crisis caused by the Covid-19 pandemic. .

During the first half of the year, gross fixed investment (IFB) in Mexico was 12.2% lower than that observed during the same period of 2019, according to calculations based on figures reported by the National Institute of Geography and Statistics.

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Original note