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Mexico Real Estate: Foreign Direct Investment up 11% from Previous Projection

13 September, 2012

Bloomberg reported late last
month that Mexico is estimated to receive 11% more in foreign direct
investment,(FDI),than was originally forecast.  This $20 billion in additional investment money secures
Mexico's position as the second-largest economy in Latin America.  The growth is due in part to its close
proximity to the United Sates and low employment wages.

Mexico also has a 25% lower
manufacturing cost than the US,and is outdoing other countries in producing
more engineers,making a variety of new trade pacts with other South American
countries. Economists in Mexico originally predicted an FDI of $18 billion,and
now are predicting closer to $19.7 billion.

Auto manufacturers such as
Volkswagen AG (VOW),General Motors Co. (GM,Mazda and Nissan Motor Co.’s,have
recently announced investments in Mexico of $400 million dollars or more.  Honda Motor Co. of Japan,is building
an $800 million factory in Celaya,Mexico.  And Finance Minister Ernesto Cordero is expecting more
announcements from other auto manufacturers by the end of the year.

Citigroup Inc.’s Banamex unit reported
the auto industry generated $69.9 billion last year in exports,surpassing the
$41.7 billion from the crude oil industry,$21.3 billion from remittances and
tourism numbers of $11.9 billion. On August 10,Finance Minister Gerardo
Rodriguez said that Mexico will receive more than $40 billion this year,
including new portfolio investments.

Bloomberg also reported that slowing economic growth is speculated to
keep inflation down and prompt banks to lower interest rates.  Economy Minister,Bruno Ferrari,claims
this is due to managing their finances responsibly.  Ferrari says the government still expects a growth of
between 3 and 4.5 percent in 2012,down from between 4 and 5 percent this year.

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