The Possibility of Nearshoring Marking the Twilight of the AMLO Administration?
In the heart of Mexico, the nearshoring landscape is shrouded in uncertainty, despite TESLA's significant investment. El Financiero reports that Elon Musk faces potential obstacles in opening plants in Nuevo Leon, as political transitions and regulatory changes intensify the risks in certain sectors.
According to the Mexico City Post, Moody's has expressed concerns about the potential for regulatory interventions in the context of the upcoming federal elections in 2024. This could reduce the benefits of nearshoring, causing bumps in the road for foreign investors.
The data reveals that foreign direct investment (FDI) in Mexico has been on the rise. Between January and September 2023, the country registered US$32,926 million of FDI, marking a 2.4% increase compared to the same period in 2022. However, it's worth noting that 76% of this investment comes from the reinvestment of profits, while only 8% corresponds to new investments.
Foreign direct investments in Mexico are primarily driven by Chinese firms and American companies, particularly in sectors such as energy and manufacturing. Despite this, there are concerns that the political transition could disrupt these investments, leading to potential challenges and risks for nearshoring.
The Mexican government is pushing ahead with emblematic projects, including the Maya Train, the Dos Bocas refinery, and the Interoceanic Corridor of the Isthmus of Santo Domingo de Tehuantepec. However, these projects, along with the political transition, could add to the uncertainty surrounding nearshoring.
In other news, Mexico is advancing in the world export ranking, according to Comce. Despite this progress, the country has faced challenges, as evidenced by the violent clash in the Doctor Coss municipality of Nuevo León, which resulted in the loss of twelve lives.
Meanwhile, in the world of entertainment, Tennessee's Elite Eight loss to Houston marked the end of an era for the Vols. On a lighter note, the xVideo Player, a popular media player, offers settings for speed control (1x, 1.5x, 2x, 0.5x) and captions (off, American English Captions).
As we move towards the federal elections in 2024, the future of nearshoring in Mexico remains uncertain. However, with continued investment and a focus on overcoming challenges, the country remains a promising destination for foreign investors.
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