La Jornada: Despite a rebound in fixed investment, signs of sustained recovery are missing, experts say

After breaking a streak of 19 months with falls in April, the advance of the Monthly Indicator of Gross Fixed Investment (GFCF), which represents the value of durable goods acquired by production units, is not an indication of a sustained recovery, specialists warn.

Aztlan Equity Management commented that the advance was already expected in light of the preparations related to the Soccer World Cup, since additional investments in infrastructure, such as transportation and hotels, were triggered in different parts of Mexico, as well as significant growth in housing, causing a rebound in fixed investment during April, but the uncertainty in the review of the T-MEC and the economic environment are factors that limit a long-term trend.

The recent fixed investment report for April has ignited signs of optimism in the market by registering a monthly growth of 4 percent, the most significant since November 2020, and an increase of 5.1 percent at an annual rate, thus breaking a streak of 19 consecutive months in negative territory.

However, a technical analysis prepared by the highly specialized investment management firm, Aztlan Equity Management, warns that this rebound should be taken with caution before being assumed as a definitive turning point in the economy. And the country has a long-term structural brake: “Mexico has already had more than two decades of growth at rates of less than one percent annually, which is directly related to industrial policies and the lack of a comprehensive growth policy,” said Alejandro Garza, investment director and founder of Aztlan Equity, indicating that consecutive months of constant increase will be required to consolidate a long-term trend.

“The United States’ position of moving to annual reviews takes away certainty from the legal framework, but we are seeing that this wave of investments towards Mexico by American, European and Asian multinationals is real and forceful. Foreign direct investment (FDI) has reached record figures during the last two years and Mexico remains the number one trading partner of the United States. In relative terms, the country continues to be better positioned than the rest of the region’s trading partners to form regional manufacturing centers,” he asserted.

For Daniel Castillo, economic analyst at Valmex, the key will be if this strength manages to be transmitted to productive investment and national consumption. If this does not happen, growth will continue to be exposed to exchange rate shocks and a slowdown in external demand, a relevant risk for the gross domestic product in the second half of 2026.