Foreign Direct Investment
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Our forecasts indicate that the current account deficit will stabilize around 1.5% of GDP in the medium term and there will not be a structural problem for its financing.
The current account deficit fell by USD 10.2 billion in the first quarter of 2020 compared to the same period of the previous year, mainly due to a higher surplus in the trade balance on non-oil goods.
Our forecast of 2.0% of GDP for the current account deficit implies that Mexico will enter a phase of economic recovery after a real GDP contraction of 0.1% in 2019. This forecast suggests that the country is not vulnerable to external shocks and that a share of the current account deficit could be financed with net FDI.
November 25, 2019
Mexico | Economic stagnation affects current account and net foreign direct investment
Our forecast that the current account deficit will be 0.1% of GDP in 2019 suggests that the country is not vulnerable to external shocks and that even such deficit could be comfortably financed with NFDI and remittances.
August 23, 2019
Mexico | Low economic growth impacts the current account during the first half of the year
Having stood at USD 20.1 billion in 2017, the current account deficit increased to USD 22.0 billion in 2018.
Foreign Direct Investment (FDI) is a very important variable for the performance of the economy. It is investment that generates jobs and, according to most academic studies, stimulates greater economic growth.
Considerable decrease in the current account deficit in the first quarter of 2019 compared to the same period of the previous year, mainly due to lower deficits in primary income and service balances.
Direct investment flows to Argentina have historically been around 2% of GDP, with the exception of the 1990s when, due to the privatisations of public companies, they were higher. In our ranking of reception and potential attraction of FDI, it is evident that Argentina has not been favoured with large capital flows.