Foreign Direct Investment in Mexico increases 32.5% during third quarter

Foreign Direct Investment in Mexico increases 32.5% during third quarter

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Despite a feeling of uncertainty created by the NAFTA renegotiation talks, Mexico received US$ 5.7 billion of Foreign Direct Investment (FDI) in the third quarter of 2017, 32.5% more than in the same period of 2016, the Economy Ministry reported Tuesday.

In the first nine months of the year, the amount received totaled US$ 21.75 billion, 10% more compared to same period last year, according to preliminary figures.

This figure is the net result of US$ 25.9 billion for inflows minus US$ 4.18 billion accounted for as decreases in FDI.

During this administration, the accumulated FDI totals US$ 163.15 billion, a figure that already exceeds by 3.5% the sexennial goal established in the National Development Plan 2013-2018 of US$ 157.6 billion, and that is 53.7% greater to the amount originally reported six years ago and corresponding to the same period elapsed from the previous administration (US$ 106.1 billion).

The FDI recorded during the first nine months of this year came from 2,662 companies with foreign capital participation and is integrated as follows:

By type of investment (source of financing): 40.3% was given through new investments, 38.3 percent reinvested earnings and 21.4% intercompany accounts.

By sector: manufacturing, 43.4%; construction, 12.1%; financial services, 11.3%; transport, mail and storage, 11.2%; and commerce, 7.4%. The remaining sectors captured 14.6%.

By country of origin: United States, 47.8%; Spain, 12.1%; Canada, 7.7%; Germany, 6.3%; and Australia, 5.7%; other countries contributed altogether the remaining 20.4%.

The figures reported only consider investments made and formally notified to the National Registry of Foreign Investments of the Ministry of Economy, hence its preliminary nature and likely to increase due to updates in the successive quarters.

Only preliminary figures published at the time were compared to avoid distortions due to the fact that the updated amounts of periods prior to the report include several upward revisions of each quarter, due to having more formally notified information about FDI movements.

The methodology for determining FDI is based on international standards, contained both in the Manual of Balance of Payments of the International Monetary Fund (IMF) and in the Framework Definition of Foreign Direct Investment of the Organization for Economic Cooperation and Development (OECD).

The FDI figures were reviewed jointly by the Ministry of Economy and the Bank of Mexico and will be included in the Balance of Payments Report of the latter.