Foreign direct investment (FDI) in Mexico will be moderate in 2025 and will be supported by the reinvestment of profits and loans between companies, instead of being driven by the inflow of new capital, according to an analysis by the Institute of International Finance (IIF ).
In its capital flows report Riding the waves of global change explained that the uncertainty about the renegotiation of the North American Trade Agreement (T-MEC) and the threat that the future president of the United States, Donald Trump, will impose tariffs and restrictions on immigration are issues that weigh on the mood of the investors.
He explained that the Mexican economy depends largely on manufacturing exports to the US market. More than remittances and FDI, strong exports have driven the bilateral trade surplus
.
The IIF explained that while the recent increase in Chinese investment is a risk, Mexico could benefit from the nearshoringthat is, the transfer of production that companies have made to the country to be closer to their sales channels.
A BBVA analysis indicates that in the coming years the nearshoring It will contribute to creating more than 1.6 million new jobs in fields focused on manufacturing, information technologies and logistics services.
The IIF projected moderation in non-resident capital flows to Latin America in 2025, after a rebound in 2024. This influx of resources is estimated due to lower economic growth in the countries of the region, the tightening of the United States in the rules that govern trade, the limited margin to lower interest rates and specific issues of each country.
However, the institute highlighted, the portfolio’s debt and loans will continue to support the arrival of capital flows, as investment will be driven by still attractive rate differentials and high financing needs in some countries.
The institute predicts that the world economy will grow 2.7 percent in 2025, after in 2024, the advance was 2.9 percent and in 2023, 3.2 percent.
For emerging countries, an increase in gross domestic product (GDP) of 3.8 percent is expected in 2025 compared to 4 percent in 2024 and 4.3 percent in 2023.
These projections reflect the expectations of the possible policies of the next US administration, not only trade policies, but also fiscal and immigration measures, as well as greater geopolitical risks.
is mentioned in the analysis carried out by specialists Marcello Estevão and Jonathan Fortun.
While these policies have not yet been implemented, their anticipated impacts could significantly shape the global economic landscape if they materialize.
they highlighted.
In turn, they mentioned that Mexico and Colombia are exposed to possible immigration policies of the US government being stricter and stopping remittances.