‘Nearshoring’ would boost Mexico’s GDP up to 2.5% in the next six years

Mexico could increase its gross domestic product (GDP) up to 2.5% in the next six years due to the “nearshoring”and reach foreign direct investment (FDI) levels of up to US$ 50,000 million (46,679 million euros at today’s exchange rate), estimated this Monday the Council of Global Companies (Ceeg).

“The phenomenon of investment relocation (nearshoring) is a great opportunity, but with an expiration date. According to our estimates, Mexico has a window of no more than six years”, pointed out the ceeg.

Regarding the opportunity cost, the recently reelected president of the Council, Alberto de la Fuenteconsidered that the flow of foreign investment could exceed the maximum level reached by the country in 2018, with US$ 35,000 million.

In this sense, the leader of the organization made up of the 62 large global companies with a presence in Mexico anticipated that a FDI minimum of US$30,000 million and up to US$50,000 million.

This would promote an increase of between 1.5% and 2% to the Mexican GDP, according to estimates by the ceeg for the next few years.

According to the Mexican Secretary of Finance and Public Credit, Rogelio Ramírez de la O, the country has a minimum year-on-year growth floor of 2.3%, while it has projected growth of 3% at the end of the year.

Likewise, the perspectives of the Council show the opportunity to increase labor productivity in the country and the North American region due to this same phenomenon of “nearshoring”.

According to the analysis of the ceeglabor productivity could grow between 15% and 30% in Mexicowhile, at the regional level, it could skyrocket from 5% to 15%.

De la Fuente added that significant job growth is also expected in the country and the North American region, with the generation of between 2 and 4 million jobs by 2030.

To take advantage of the promise of thenearshoring”, de la Fuente, who also heads the oil company Shell Mexicoconsidered it necessarysolve complex problems, bottlenecks and shortcomings that demand political generosity and high-mindedness, in a trilateral way”.

Furthermore, he said, “Multilateral and multisectoral investment, infrastructure, integration and financing efforts are required to make Mexico and the region grow more”.

The business leader stressed that Mexico Today it is more strategic than ever for North America due to its preferential access to the US market, macroeconomic stability, and its wide range of free trade agreements.

Among others, he mentioned competitive production costs, a young and highly productive population, regional demand, as well as the fact that it serves as a bridge with Latin America.

In addition, the leader of global companies in Mexico highlighted the world’s commitment to achieve higher levels of decarbonization in the world by 2030.

For this reason, he mentioned that they will prepare a document of proposals that could help the sustainable transition of the entire Mexican economy, where a long-term sustainable strategy is crucial, which will be presented to all the presidential candidates who will participate in the 2024 elections.

Source: EFE