Mexico registers record US$31bn in H1 foreign direct investment

Mexico registered a record US$31.1 billion in foreign direct investment (FDI) in H1, up 7% compared to the same period in 2023, according to preliminary figures from the economy ministry.

Of the total, US$30.3bn corresponded to reinvested profits, while new investments totaled US$900 million.

“For the second consecutive year, we highlight the unprecedented amount of reinvestment of profits by companies in the country, due to economic stability, the good business environment and the competitive advantages offered, an ideal situation to expand and improve their production processes, becoming companies that attract new investments,” the ministry said in a statement.

It added that the behavior of intercompany accounts observed in the second quarter "suggests an adequate degree of liquidity of the companies to cover the debts acquired in previous years and to make loans to companies belonging to their corporate group."

The US remained the main investment partner, accounting for 44% of total flows, followed by Germany and Japan.

Also, 68% of FDI in the first six months was concentrated in five federal entities, highlighting the importance of Mexico City as the main destination.

The ministry said that "54% of registered FDI is concentrated in the manufacturing sector, with the most notable industries being transport equipment, beverages and tobacco, chemicals, computer equipment, food, metals, and plastics and rubber."

Mining sparkles

Mining FDI, for its part, increased by 329% compared to the nearly US$700mn reported in the first half of 2023, when the sector represented 3% of the foreign capital raised.

Although the ministry did not provide detailed amounts for each sector, it said that mining accounted for at least US$3bn, with a 10% share of the FDI captured between January and June.

Partial figures for mining FDI include oil and gas, metal mining and mining-related services.

In 2023, sector FDI increased 118% over 2022, to US$3.49bn.

Mining chamber Camimex reported in July that of last year's total, the metallic minerals subsector reached US$2.11bn, representing 42% of capital received and up 150% versus the FDI in mining in 2022.

"These numbers are influenced by the rising price of metals, mainly by gold and silver," it said about the behavior of FDI.