In Mexico, the economy demonstrated strong growth in February, marking its fastest month-over-month rate in over three years, according to official data from the national statistics agency, INEGI. The Global Indicator of Economic Activity (IGAE) rose 1.4% in February compared to January, showcasing the strongest monthly growth since September 2020.
This economic momentum comes amidst increased political spending ahead of the upcoming June elections, stimulating sectors such as transport, printing, media, wholesale commercial activities, and construction. The primary sector, encompassing agriculture, spearheaded the growth with a 16.5% expansion in February, while the services sector expanded by 1.2%. In contrast, the manufacturing sector contracted slightly by 0.1%.
Despite a contraction of 0.9% in January, the Mexican economy rebounded strongly in February, with the primary sector expanding by 5.8% year-on-year, the manufacturing sector growing by 1.5%, and the services sector increasing by 3.2%.
Alfredo Coutiño, Latin America director at Moody’s Analytics, attributed the economic growth to the “expansionary phase of the political cycle” and the commencement of political campaigns, boosting various economic activities.
However, the International Monetary Fund (IMF) revised its economic growth forecast for Mexico in 2024 to 2.4% from 2.7%, citing weaker-than-expected outcomes earlier in the year.
In a separate development, the Economy Ministry (SE) announced that foreign companies had made 93 investment announcements for Mexico between January 1 and April 15, amounting to over US $36 billion. These investments are expected to create 47,702 direct jobs.
Some notable investment announcements include Spain’s Tango Solar with $1.17 billion, Sempra Infrastructure from the United States with $550 million, and Chinese tire manufacturer Sailun with $427 million. Additionally, major investments were announced by leading companies such as Amazon Web Services ($4.96 billion), DHL Supply Chain ($4 billion), and Mercado Libre ($2.45 billion).
The manufacturing sector emerged as the primary beneficiary, attracting 54% of the announced investments, followed by transport, media, and retail industries, each receiving 14% of the total investment.
Querétaro stands out as the largest beneficiary of the investment announcements, with almost $5.8 billion expected to flow into the region, primarily due to Amazon Web Services’ plan to build new data centres.
With US companies leading the investment charge with $19.47 billion, Mexico is poised for further FDI growth in the coming years, fueled by these investment announcements and the growing trend of nearshoring.
