Mexico’s Finances Remain Strong, Economy Slows Down
Home > Finance > Weekly Roundups

Mexico’s Finances Remain Strong, Economy Slows Down

Photo by:   Image by Albertoadan from Pixabay
Share it!
Emilio Aristegui By Emilio Aristegui | Junior Journalist and Industry Analyst - Thu, 12/09/2021 - 18:06

Mexico’s SHCP touted stability in the country’s public finances, as Banxico presents a report indicating a slowdown in the economy.

A very busy week in the finance section, with more companies earning their horn, becoming the newest unicorns in the region.

Ready? This is the Week in Finance!

Unicorn Status for Online Grocery Sales Startup Jokr

Ralf Wenzel, Co-Founder and CEO, Jokr, celebrated Jokr’s recognition as one of the newest unicorns in the market. “We were not planning to raise so soon. We had sufficient capital after raising a substantial round in July. Since then, we built out in so many different countries and began getting much interest in what we were doing,” he said. Five months after a Series A funding round worth US$170 million, the company raised US$260 million through a Series B round. The latter made Jokr one of the fastest companies to receive the ‘Unicorn’ label.

Clara: Another Newborn Unicorn

The financial technology startup solution Clara became a new member of the growing Mexican unicorn family, after receiving a US$70 million funding round. Clara reached the “unicorn” status after beginning operations in Mexico eight months ago. The unicorn offers credit cards to businesses and a spend-management platform.

Merama: E-Commerce Partner and Young Unicorn

Following Advent International and Softbank’s US$60 million funding to startup Merama, the startup has reached a valuation of US$1.2 billion. Merama’s success is attributed to the growing e-commerce market in Latin America as the startup partners with multiple e-commerce companies across the region to accelerate growth and profit through working capital investment, while also offering strategic and functional knowledge with proprietary technology.

Mexican Fintech Startup Arcus Joins SPEI

Payment-as-a-Service platform Arcus’ newest partnership with SPEI creates seismic growth for the startup. “Mexico needs a revolution in access to SPEI, and through the new payment platform we have built, we make it easier for our clients to operate SPEI with an ease never seen before in the market.”

Mexico-Ecuador Ties Strengthen

Both countries seek to increase the flow of goods and services between them, as representatives from both governments present a plan to further develop a free-trade agreement during a meeting with the World Trade Organization (WTO). Mexico’s representative stated: “In particular, the parties were working on a concrete and ambitious free-trade agreement within next-generation disciplines that would benefit both economies.”

SHCP Announces Strong Public Finances in October

The Ministry of Finance and Public Credit (SHCP) announced that unexpected revenues in the public sector and increases in tax collection benefitted Mexico’s public finances in October. The ministry also highlighted that Mexico’s refinancing strategy has been successful so far, reducing the country’s debt by MX$42.2 billion (US$1.98 billion) from Jan. to Oct. 2021. Mexico’s net debt currently stands at MX$9.8 trillion (US$464 billion), as the SHCP assures that the country’s strategy continues to provide stability and protection against financial risks in the financial market.

Mexico’s Economy Slows Down: Banxico

The Bank of Mexico announced that its board increased the target for the overnight Interbank Interest Rate (IIR) by 25 base points, as uncertainty continues to affect Banxico’s decisions. “In 3Q21, economic activity slowed its recovery, exhibiting a contraction compared to the previous quarter and persisting heterogeneous performance among its different sectors. This is due to the recrudescence of the pandemic during the period. To the above was added a sharp drop in business support services activity due to the enforcement of the new regulation regarding subcontracting labor,” reads Banxico’s report.

Remittances Shatter Previous Record

For the fifth time this year, remittances reached an all-time high, reaching a total of US$4.82 billion in October, which is attributed to the recent flow of migrants to the US according to a BBVA research. October’s growth represents a 33.8 percent annual increase, with 12.5 million registered transactions averaging US$384.

Oil and Gas Receive Record Investments

The US Ministry of Economy and Department of Commerce announced that Mexico’s oil and gas sector attracted US$1.2 billion in foreign direct investment (FDI). The same department estimates that the world’s most prolific oil and gas companies will have invested up to US$18 billion more by 2024 to conduct seismic surveys, develop exploration efforts and contract drilling equipment for 794 wells.

This week’s Expert Contributor and Pretmex CEO Fernando Padilla’s Let Your Money Make Money gathers important insights on personal finances.

Photo by:   Image by Albertoadan from Pixabay

You May Like

Most popular