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International Finance Groups Say Yes to Foreign Investment in Mexico

Monday, November 21, 2011

International Finance Groups Say Yes to Foreign Investment in Mexico

By Marissa Sánchez

Direct foreign investment (DFI) in Mexico has declined by 67.3%, compared with the results of 2010. It went from $7,648.6 billion in the second quarter of last year to $5,149.1 billion, according to the Secretariat of Economy.

However, specialists from Ernst & Young expect fast-growing markets to grow in 2011, altogether 6.2% - nearly four times the 1.6% growth reported by the European area.

Ernst & Young, in its quarterly forecast report for rapidly growing markets (RGMF), says that DFI to emerging markets (among them Mexico) increased from $205 billion in 2000, to $444 billion in 2010. They also received about 50% of global income from this type of investment.

The international consultant warns that despite weak growth in advanced economies - a phenomenon that invariably affects the development of rapidly growing markets - the 25-member country bloc will have to ante up for domestic consumption.

Regarding next year, it forecasts the bloc of emerging economies to increase 5.9%, and the European bloc to fall 1.1%.

Another report on DFI, this from BBVA, notes that of the emerging countries China received the greatest amount of DFI in 2010, although Mexico, Indonesia, Singapore, Brazil and Hong Kong stood out for their dynamism.

According to the report of the Economic Studies Service of BBVA, Mexico's recovery of DFI has been relatively faster than the countries that are traditionally considered as strong competitors, China, Russia and India.

BBVA reported, as have most recent opinion polls, that Mexico's recovery shows it is a relevant and attractive destination for investment.

HSBC bank executives stressed the benefits of investing in Mexico: its strong economy, skilled labor, privileged geographical position, and infrastructure investment.

The HSBC general manager for Europe, Asia and Latin America, Sandy Flockhart, said that "Mexico is a very attractive destination, and it offers access to the U.S. market."

Flockhart said that by 2050 Mexico will be ranked 10th among the world's leading economies.

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Mexican Business Web (MBW), Mexico, DF; MBW translation (edited)

Published Monday, November 21, 2011 8:21 AM by Zinnia Q.

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