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Mexico ranks in top 10 for attracting foreign direct investments

Riviera Maya, Q.R. — Mexico has been listed as one of the top 10 countries to attract direct foreign investments. While the United States, Canada and Japan led the ranking with the first three places of ideal countries for Foreign Direct Investment (FDI), Mexico was placed eighth below Brazil, the United Arab Emirates, India and China.

Mexico was positioned as the eighth most attractive emerging market to attract Foreign Direct Investment, according to the FDI Confidence Index 2023 report prepared by the Kearney Consultancy.

The report revealed that in this edition, a special ranking was made for emerging countries attractive for Foreign Direct Investment (FDI). Mexico ranked below other countries such as Brazil (7th place), United Arab Emirates (3rd), India (2nd) and China (1st place).

In the Global Ranking which evaluates 25 economies, Mexico was left out for the fourth consecutive year. The United States, Canada and Japan led the ranking with the top three places, and China surprised by moving up three to seventh place.

The report suggests that global investors are confident in several areas with the majority of companies (82 percent) saying they plan to increase their FDI in the next three years.

Even more indicated that they believe that FDI will boost the profitability and competitiveness of their companies. Of the 12 percent of investors who said that friendshoring and nearshoring are really affecting their FDI decisions, 45 percent said that the main reason behind it is the conflict between Russia and Ukraine.

According to the report, 50 percent of the investors from Europe and Asia said they were especially concerned about how these tensions are affecting their foreign direct investment decisions.

On the other hand, 33 percent of European investors who are affected by friendshoring or nearshoring also said that geopolitical tensions and the US-China trade war were a key factor in their investment prospects.

“Our results this year also reflect a degree of caution. According to the survey , investors expect rising commodity prices, heightened geopolitical tensions and further political instability in emerging markets,” said Erik Peterson, partner and managing director of the Global Trade Policy Council at Kearney.

Peterson noted that those investors who said their FDI levels would decline over the next three years highlighted concerns about exchange rates, risk tolerance and the macroeconomic environment.