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Foreign Investment and Trade on the Rise in Mexico

13 September, 2012

According to a recent report in the Wall Street Journal,Mexico’s Economic Ministry reported preliminary figures near mid-February,stating that foreign direct investment rose by at least 17 percent to hit $17.73 billion US. This was spearheaded by a 70 percent increase in new investments and is 17 percent higher than the 2009 revised amount of $15.21 billion US. The 2010 figure is also 55 percent higher than the initially reported amount for 2009. Almost 60 percent of the total investment came from the manufacturing sector,with commerce and financial services closely following.

The top foreign investor in Mexico during this period was brewing company Heineken NV (HINKY,HEIA.AE). The Netherlands-based company has acquired Mexican beer beverages and Femsa (FMX,FEMSA.MX),a retail corporation. Other significant foreign direct investors were the United States,Spain,Canada,and then the United Kingdom.

In further Mexico financial news,the Wall Street Journal reported that Mexico cataloged a trade surplus for January of 2011,with imports and exports now growing at an incredible pace. In fact,according to the National Statistics Institute,Inegi,Mexico reported a $63 million US trade surplus for the month of January. 

Economists surveyed previously by the Wall Street Journal had projected an average estimate for a deficit of about $291 million US,and few economists in the survey predicted the surplus that actually took place. The 2010 deficit was low as well,in part thanks to manufacturing exports and imports growing much faster than expected,outperforming imports of consumer goods,equipment,and machinery.

Mexico’s exports for January 2011 were also 28 percent higher than January 2010,rising to $24.6 billion. Oil-sector exports saw a 41 percent rise to $4.37 billion,and manufacturing exports rose 25 percent to $19.08 billion. Mining exports rose 64 percent to $198.9 million,and agricultural exports increased 30 percent to $946.3 million.

Imports saw a healthy increase of 25 percent as well,rising to $24.53 billion in January. Oil imports rose 41 percent to $3.31 billion,while consumer goods increased 28 percent to $3.89 billion. Intermediate goods climbed 27 percent to $18.06 billion,and equipment and machinery escalated to $2.58 billion,a 10 percent increase.