Peso Falls Amid Trump Policy Proposals: Finance Week

This week in finance: The peso hit its lowest point in two years following Donald Trump’s tariff proposals. Meanwhile, Mexico's 2025 Federal Expenditure Budget plans to reallocate up to MX$20 billion to education, agriculture, and water, among other sectors. Foreign direct investment (FDI) reached US$3.2 billion, a decline from the previous quarter, while the national economy grew by just 0.8%, marking its slowest pace since 2021.

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US Policy Proposals Threaten Remittance Flow to Mexico, CA

Remittances, a lifeline for millions of families across Latin America and the Caribbean, are facing unprecedented challenges as US policy proposals signal significant disruptions, including mass deportations, potential taxation on remittance flows, and stricter immigration controls. Together, these changes could destabilize regional economies, particularly those heavily reliant on US remittances.

2025 PPEF to Reallocate MX$20 Billion in Funding

Between MX$15 billion (US$740.8 million) and MX$20 billion from the 2025 Federal Expenditure Budget (PPEF) will be reallocated to critical sectors, including education, culture, water, agriculture, security, and infrastructure, says the Political Coordination Board in the Chamber of Deputies. While the government plans to allocate funds from the dissolution of autonomous bodies, additional departmental cuts are necessary to meet the target.

Mexico FDI Hits US$3.2 Billion in 3Q24, Steady from Last Year

Mexico attracted US$3.2 billion (MX$65.8 billion) in foreign direct investment (FDI) during 3Q24, a figure comparable to the US$3.1 billion reported during the same period last year. However, it is significantly lower than the US$5.6 billion recorded in 2Q24 and the US$26.9 billion in the first quarter, according to data from Mexico's Central Bank (Banxico).

Mexico’s Economy Grows 0.8% by September, Lowest Since 2021

Mexico’s economy reflected slowing growth across key sectors despite a modest recovery in September. According to data from the National Institute of Statistics and Geography (INEGI), the country's Global Economic Activity Indicator (IGAE) grew by 0.8% annually in September, marking the lowest year-on-year increase since November 2021. This follows a two-month deceleration after annual growth rates of 1.3% in August and 2.1% in July. 

AI Tools Fuel Banking Fraud Surge, Industry Takes Action

Artificial intelligence (AI) has revolutionized the financial sector, enhancing operational efficiencies while simultaneously driving a sharp increase in fraud. Techniques such as phishing, deepfakes, and synthetic identities have become more prevalent, complicating the battle against fraud. 

Financial Inclusion Set to Grow with Tokenization, Biometrics

Advancements in technology, such as tokenization, blockchain, and no-code platforms, are transforming the financial services sector by enhancing security, efficiency, and global financial inclusion. In Mexico, where 70-75 million people lack access to formal credit, high smartphone penetration provides a critical opportunity to bridge the gap for the unbanked population.