FOREIGN DIRECT INVESTMENT REACHES NEW ALL - TIME HIGH IN MEXICO
The Ministry of Economy informed that foreign direct investment received by Mexico amounted to $31,096 billion dollars from January through June of this year. This represents a new historical maximum. Said amount was 7% higher than the total registered in the first 6 months of previous year, when the entry of $29,041 billion dollars was recorded. The current foreign direct investment comes from 2,787 Mexican companies with foreign capital participation, from 1,977 trust contracts, as well as from 28 foreign legal entities.1
THE FIRST HALF OF 2024 PRESENTED A 39% INCREASE IN THE DEMAND FOR INDUSTRIAL SPACES
According to a report prepared by the real estate services Firm CBRE, regarding the industrial real estate market in Mexico, 1.2 million square meters were demanded for this sector during the first half of 2024. This implies a 39% increase in comparison to the same period in the year 2023. The sectors where most of the new demand is focused are the automotive, home appliances' manufacture, and electronics industries.
ECONOMIC SLOWDOWN IN MEXICO IN THE SECOND QUARTER OF 2024
During the second quarter of 2024, the Mexican economy reported its slowest progress in just over 3 years and analysts expect lower growth in the second half of the year; even some forecasts anticipate a downward. According to INEGI, between April and June GDP grew 1.1% annually, down to 1.9% annually between January and March. This represents the most moderate advance of the Mexican economy since it contracted 1.6% annually in the first quarter of 2021. Finally, in quarterly variation, the economy only advanced 0.2%.
EFFECTS OF THE JUDICIAL REFORM IN MEXICO BEGIN
Following the uncertainty surrounding the Judicial Reform, Morgan Stanley adjusted its recommendations for equity investments in the Mexican market and downgraded Mexico to the UW range, i.e., underweight. Morgan Stanley stated that reforming the Judiciary should increase the country's risk premiums, as well as limit capital investments. This would be the first negative impact on Mexico's markets following the Judicial Reform proposal.
THE ANCILLARY LEGISLATION FOR THE IMPLEMENTATIONOFTHEMEXICOJUDICIALREFORM ISSTILLPENDINGOFAMENDMENT
On Sunday, September 15, via the Federal Official Gazette (Diario Oficial de la Federación), President And rés Manuel López Obrador enacted the decree by which various provisions of the Federal Mexican Constitution relative to the structure and authorities of the Judiciary Branch of the Federation were amended (the "Judiciary Reform"). Among the most relevant changes made by the Judiciary Reform was the public election of all federal positions within the Judiciary, including Justices, Magistrates of the Election Court, Magistrates of the Federal Disciplinary Committee and Judges. Congress (El Congreso dela Unión) has 90 days counted from the day in which the Judiciary Reform came into effect (September 16) to amend the corresponding federal laws to carry out the elections of the Judiciary for the extraordinary period 2024 - 2025 and subsequent election periods. The National Electoral Institute (Instituto Nacional Electoral) has the authority to issue the necessary agreements to carry out the extraordinary electoral process in 2025.
Footnote
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