Mexico | Investment in Mexico: mixed signals

Summary

This year, investment in Mexico has experienced notable growth. Between January and July, it grew 20% compared to the same period of the previous year.

Key points

• Key points:
• This is, without a doubt, good news for the Mexican economy since investment not only directly affects current growth (it represents a quarter of GDP) but can also increase future growth by increasing the capital stock.
• If we analyze its components, we will see that both construction and investment in machinery and equipment grew in the period by 20.6% and 19.2%, respectively.
• These high rates have reversed the decline in investment seen at the beginning of this administration. The total investment leve is 18% higher than what prevailed at the beginning of the current government; construction is also 18% higher, and investment in machinery and equipment is 17% higher.
• When analyzing construction, the significant drop in the residential component and the fact that non-residential construction growth is explained mainly by investment in projects with low social profitability are of considerable concern.

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