Mexico, the most attractive to invest, says the Spanish IP

Madrid. Large Spanish companies, but also medium and small ones with the ability to transcend borders, have Mexico as their favorite destination to invest in Latin America, far ahead of Colombia, Chile, Peru, Brazil and Argentina.

More than 82 percent of Iberian companies with interests in the region are present in Mexico, mainly because they consider it to be the best place to develop their projects, but also because they do not see risks of political or economic instability, among other things due to the solvency and strength of the peso.

According to the Spanish Investment Report in Ibero-America, carried out by the IE University (curiously the institution where former President Felipe Calderón has given a couple of lectures, in which he speaks in apocalyptic terms about the country’s situation), Mexico is the most attractive for Spanish corporations, both multinationals, large companies and SMEs.

The report asks a series of questions to the heads of up to 50 companies with interests in Latin America and in most cases Mexico was the country with the best indicators, the most promising and with the most stability for the future.

For example, to the question of what they predict the economic situation will be like in 2024, the majority responds that it is good or very good, meaning Mexico is the one with the highest score, 3.60, on a scale of 0 to 5, very ahead of the worst rated, which are Ecuador, Cuba and Venezuela, which barely exceed 2 points.

Insecurity, one of the negative points

The report directed by the prestigious economist Juan Carlos Martínez Lázaro states that 82 percent of Spanish companies expect their turnover in the region to increase in the next three years. Furthermore, 58 percent of large consortia and 38 percent of SMEs consider that the weight of their business in Latin America will exceed that of Spain in the short term, notably in Mexico.

That is, the perception of Spanish businessmen about the economic situation that the Ibero-American economies will face maintains the trend registered in 2023, with Mexico, Chile, Colombia, the Dominican Republic and Uruguay achieving the best rating. And Mexico is, by far, the most prominent country as an investment destination.

Among the risks or challenges in the region, companies highlight the weight of inflation and its impact on the evolution of sales, as well as political risk and insecurity. But also in the complexity of tax frameworks, especially in Brazil and Argentina. Once again, the case of Mexico appears as one of the most attractive, both due to macroeconomic stability, the evolution of the internal market and political stability. The only negative point that stands out is citizen insecuritybut even so, Mexico City is, for example, the favorite destination for Spanish businessmen to invest in Latin America.

One of them is Alfonso Benavides, member of the Board of Directors of Auxadi, who explained that his company It has been firmly betting on Latin America, considering it a privileged destination for Spanish, American and European investors.

The person responsible for the report, Martínez Lázaro, explained that “in Ibero-America a year ago the International Monetary Fund predicted growth of just 1.6 percent, due to inflation that refused to go down, at an interest rate that in many countries reached two digits and, above all, the fear of a notable slowdown in the North American economy due to the monetary tightening of the Fed.

However, as inflation rates slowed, their performance was better than expected. In the end, growth will have been around 2.5 percent, far exceeding what the IMF predicted. For this year, the increase in economic activity is expected to be around 2 percent, a figure that could improve over the course of the year.

Hence, says the expert, the majority of Spanish companies with interests in the region, specifically in Mexico, see that the economic situation will be stable and there is confidence in the short-term future. They emphasize again that Mexico is the country with the best performance this year, despite the institutional stoppage it will suffer due to the presidential elections, followed by Chile, Colombia and the Dominican Republic.

On the opposite side, Cuba and Venezuela are once again among those that will experience a complicated economic situation, and Ecuador is added, influenced by the outbreak of violence faced. Furthermore, the report warns that Mexico City is, and for nine years in a row, the metropolis that Spanish companies prefer for their central operations in the regionand Mexico and Colombia, followed by Chile, Peru and Brazil, are where the most companies plan to increase their investments during 2024.