Although financing for companies in Mexico has seen dynamism, the effect of companies relocating to the country or ‘nearshoring’ is not the trigger, BBVA Mexico considered this Thursday.
“A pattern has been registered in the dynamics of credit flows and balances that does not necessarily imply the use of financing for purposes related to ‘nearshoring’“said Carlos Serrano, BBVA’s chief economist in the country, when presenting the ‘Banking Situation’ report.
In contrast, Serrano indicated that the dynamism in credit to companies comes from national investment.
In fact, the chief economist of BBVA Mexico said that the impact of ‘nearshoring’ will be reflected in new flows of foreign direct investment (FDI).
“If we understand ‘nearshoring’ as the transfer of production from China to the market near the United States, we will have to increase foreign investment“, said.
In this sense, he detailed that, in terms of new investments, Mexico’s FDI at the end of 2023 presents a drop.
However, although its effects are not yet visible to BBVA, Serrano did point out that when its effects on FDI are noticeable, it could have a favorable impact on credit to companies and the business of banks established in the country.
On the other hand, he highlighted that, at the end of 2023, credit to companies reached its highest average growth in the last five years, with an average real increase of 5.7%, the highest average annual growth since 2018, when a real rate of 9.4%.
In December 2023 alone, the bank’s report stated, current credit to companies grew at a real annual rate of 6.1% (7.8% nominal), higher than the real rate of 4.5% (11.6% nominal) observed at the close of 2022.
During the last year, Mexico registered US$36,058 million in FDI, the highest figure in its history, according to the Ministry of Economy of the Mexican Government, while it has identified 378 investment announcements, with an investment expectation of US$110,744 million in a period of up to three years.
Source: Gestion
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