Foreign direct investment (FDI) in Mexico surpassed $31 billion during the first six months of the year, setting a new record.
This marks a 7% rise over the same time last year, as per the federal Economy Ministry (SE).
Indeed, the ministry reported on Sunday that approximately $30.3 billion represented reinvested earnings, while new investments amounted to $909 million.
Additionally, companies unveiled over $45 billion in planned investments during the same six-month period.
According to BBVA Mexico's economic research department, a low level of new investment typically indicates that companies are not fully capitalising on the relocation trend.
However, the continued reinvestment by companies already established in Mexico suggests they are satisfied with their earlier investments, Mexico News Daily reports.
As such, despite a year-on-year fall of $1.2 billion in new investment from 2023, reinvestment surged by nearly $7.7 billion. Moreover, the latest data reveals that 97.4% of foreign investment profits earned between January and June this year remained in Mexico rather than being repatriated to the investors' home countries.
Meanwhile, financial transactions such as loans, charges, and payments between Mexican companies and their international partners resulted in a $101 million loss, a stark contrast to the first half of 2023 when Mexican subsidiaries received $4.3 billion from their international counterparts.
Additionally, Economy Secretary Raquel Buenrostro stated that the US remains Mexico's primary investment partner, with US companies accounting for 44%, or $13.7 billion, of the FDI.
Germany followed with nearly $4.2 billion, while Japan ranked third with $3.1 billion.
The new half-year record for FDI was driven by a strong performance in Q2 following a 13.6% decline in Q1 FDI compared to Q1 2023. During Q2 2024, companies in Mexico City were the primary beneficiaries, receiving 46% of the total FDI.
“The behaviour of FDI during the second quarter of 2024 suggests sufficient liquidity to cover debts acquired in previous years and to allow for loans within corporate groups,” according to the SE report.