Guanajuato leads FDI rebound in 2021

After the ravages of the Covid-19 pandemic in the arrival of foreign capital during 2020, Guanajuato led the recovery of the capture of Foreign Direct Investment (FDI) last year.

At the national level, FDI grew 13.2% at an annual rate in 2021, after registering a fall of 18.8% in 2020; This recovery trend was led by the state of Guanajuato with an annual increase of 775.9%, according to data from the Ministry of Economy (only the figure for the fourth quarter of last year is preliminary).

Foreign investment in Guanajuato territory amounted to 1,745 million dollars, 119.2% more than in 2019, the pre-pandemic year, and 775.9% higher than the 2020 indicator; by amount, it was the largest in the last three years.

By type of investment, the 1,745 million dollars of FDI correspond to 44.4% of accounts between companies, 30.1% of new investments and 25.5% of reinvestment of profits.

The item of new investments stands out, since in addition to presenting an annual increase of 69.5%, it expressed confidence of foreign investors to inject capital into the entity.

Guanajuato’s dynamism came from the automotive sector. The economic branches with the greatest flow of FDI were the manufacture of automobiles and trucks (565 million dollars), the manufacture of auto parts (495 million) and the manufacture of rubber products (144 million).

While by country of origin, the largest amounts of investment came from Japan (644 million dollars), the United States (438 million), Spain (223 million), Germany (148 million) and France (135 million). At the other extreme, only two negative balances were recorded: the Netherlands (-7 million dollars) and Italy (-31 million).

The 1,745 million dollars from Guanajuato placed the entity in the sixth position of highest FDI attraction, behind Chihuahua (1,843 million), Jalisco (2,098 million), Baja California (2,213 million), Nuevo León (4,026 million) and Ciudad from Mexico (5,057 million).

Other highlights

Guanajuato was not the only entity to increase the arrival of foreign capital. In total, 15 states showed annual growth in their FDI during 2021.

The Guanajuato territory was followed by four entities with triple-digit variations: Michoacán (278.5%), Chihuahua (190.4%), Guerrero (124.9%) and Quintana Roo (107.4 percent).

For their part, in the group with double-digit increases were Tamaulipas (91.0%), Baja California (85.0%), Baja California Sur (78.6%), Sonora (58.2%), Campeche (55.7%), Nuevo León (30.1 %), Chiapas (26.1%) and Coahuila (22.5%).

Durango obtained an annual increase of 7.2% in attracting foreign investment, while Zacatecas went from a negative balance in 2020 (-406 million dollars) to a positive balance (1,315 million).

In the rest of the entities, the attraction of FDI was lower in 2021 compared to the previous year. The most pronounced drop corresponds to Aguascalientes, with -95.5%, by capturing 33 million dollars, compared to 744 million in 2020.

They also highlighted the decreases in Tlaxcala (-87.5%), Morelos (-75.9%), Nayarit (-69.7%), Hidalgo (-52.6%), Colima (-50.9%), Sinaloa (-49.6%), Tabasco (- 35.4%), State of Mexico (-31.4%), Mexico City (-25.1%), San Luis Potosí (-24.8%) and Puebla (-23.3 percent).

Lastly, single-digit declines were in Querétaro (-4.9%), Yucatán (-4.9%), Veracruz (-2.5%) and Jalisco (-1.6 percent).

In the case of Oaxaca, it was the only state that showed a negative balance in its FDI, of -109 million dollars.

Pre-pandemic level

Compared to foreign investment in 2019, 15 entities managed to exceed the pre-pandemic threshold.

The most relevant results, due to triple-digit rates, were observed in Michoacán (246.4%), Durango (198.3%), Guerrero (142.3%), Guanajuato (119.2%) and Sonora (104.8 percent).

Other important positive variations in the reception of FDI were in Baja California Sur (89.3%), Baja California (86.8%), Zacatecas (76.2%) and Campeche (43.8 percent).

The podium of the territories with the greatest decreases was made up of Aguascalientes (-92.6%), Tlaxcala (-87.0%) and Morelos (-85.8 percent).

FDI decreases 25.1% annually in 2021

Despite the fall, Mexico City is ranked first in the country for foreign investment

Despite the fact that for the second consecutive year, Mexico City presented a drop in the attraction of foreign capital, mainly due to the Covid-19 pandemic, the country’s largest economy was placed first in attracting Foreign Direct Investment (FDI). ) during 2021.

According to the local Secretariat of Economic Development (Sedeco), the city was positioned as the entity with the highest accumulated FDI in 2021, since a total of 5,057 million dollars was registered.

Precisely, the local unit stated that the activities that managed to capture the most economic resources from foreign resources were trade, financial services and insurance, mining, business support services, as well as generation, transmission and distribution of energy.

“The main countries that invested in the city were the following: the United States, Spain, Switzerland, the United Kingdom and Germany,” explained Sedeco.

During the fourth quarter of last year the city captured 388.5 million dollars, while in the third quarter it was 818.3 million, in the second 895.9 million and in the period from January to March 2,954.2 million arrived in the country’s capital.

It is important to point out that, as last year progressed, a decrease in FDI received was observed, that is, each quarter there was a fall compared to the immediately previous period.

At the same time, the data from the Ministry of Economy reflect that since 2019 the arrival of FDI has been on the decline, in that year 8,421.2 million dollars arrived in Mexico City; meanwhile, in 2020, when the health contingency began, 6,749.6 million were captured.

It should also be noted that during 2018 the city registered 5,845.7 million dollars, with which 2019 meant a year of growth.

In addition, 2019 was also the second best year of FDI for Mexico City within the records of the database of the Ministry of Economy, after 2001, when 10,219.5 million arrived.

Local reactivation plan

Preserving and improving the attraction of foreign capital was also one of the main objectives within the different economic reactivation plans that have been presented at the local level to alleviate the negative effects of the pandemic.

Since June 2020, the Government of Mexico City has presented reactivation projects and plans, the first contemplated an investment of 76,267 million pesos in public and private works to generate a total of 987,183 direct and indirect jobs.

Precisely, in July 2021, the latest reactivation plan was announced, which is focused on 10 points.

The 10 lines of action of this new plan were: to guarantee vaccination for the entire population; income support for families and MSMEs; public investment in mobility, water and social infrastructure; emerging actions for the reactivation of construction; promotion of strategic projects with private companies; tourist and cultural reactivation; impulse to Vallejo-i; reactivation of the Historic Center; circular economy and clean energy, and safe city.

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