Mexico, among the 25 most attractive countries for foreign investment

Mexico City. After four years outside the group of the 25 most attractive countries for foreign direct investment (FDI), Mexico was placed in 21st position in that group of nations last year, Kearney reported.

In a global environment of decreased FDI flows, in the case of Mexico it has increased and one of the factors that explain the trend is the expectation that the relocation of value chains has caused among investors, a phenomenon also known as nearshoring.

In addition to the relocation of companies, the country has increased its attractiveness for foreign investment in industries such as public services, heavy and light. Likewise, its attractiveness increased in all regions of the country, explained Omar Troncoso, partner at Kearney México.

At the top of the Foreign Direct Investment Confidence Index, prepared by Kearney for 26 years, are the United States, Canada, China (including Hong Kong), the United Kingdom and Germany.

According to the study presented this Wednesday, in addition to Mexico, at top Brazil also entered, in 19th place; Taiwan, at 22; Poland, at 23, and Argentina, at 24, countries that benefited to some extent from the reshoring (return of value chains), nearshoring o friendshoring (investments that privilege friendship between nations).

In the specific case of Mexico, the consulting firm in charge of the list emphasized that the country rejoins the main index at number 21 after a four-year hiatus, perhaps due to the benefits it is obtaining from the relocation of value chains.

He emphasized that in 2023 alone the country registered 363 investment announcements for a total amount of approximately 106 billion dollars. The three most important were those of Mexico Pacific Limited, for 15 billion dollars; Tesla, for 10 billion dollars, and Copenhagen Infrastructure Partners, for a similar amount.

In this panorama, in which companies are rearranging, Kearney decided to incorporate for the first time an index for emerging markets, which in 2023 was led by China and followed by the United Arab Emirates, Saudi Arabia, India, Brazil, Mexico, Poland and Argentina.

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In 2019, the first year of the administration of President Andrés Manuel López Obrador, Mexico was placed in 25th place in the Kearney indicator, a drop from the 17th place registered in 2018. Subsequently, in 2020, 2021, 2022 and 2023 the country was outside the group of the first 25, to return in 2024, ranking 21.

Although the country remained outside the list of the most attractive countries for FDI for four years, Kearney accepted that during that period the flow to Mexico remained stable.

He highlighted that in 2023 the FDI that Mexico received exceeded 36 billion dollars, equivalent to 2.7 percent of the country’s gross domestic product. Of that total, 74 percent was reinvestment of profits, 13 percent transfers between companies, and another 13 percent new investments.

Investment attractiveness in Mexico increased in the public service, heavy industry, and light industry industries; Likewise, attractiveness grew in all regions of the countryassured Omar Troncoso.

He highlighted that according to the International Monetary Fund, Mexico became the twelfth economy in the world in 2023 and will continue to gain with the lower risks that the United States is taking in Europe, in addition to that according to the Kearney Reshoring Index, Mexico is the country that has benefited the most from manufacturing investments migrating from Asia and elsewhere.

He added that in recent years Mexico has significantly increased its exports to the United States as a result of the nearshoringwhich led to it becoming the main supplier of goods to the world’s main economic power in 2023.