Gross Fixed Investment, Interest in Bonds FallsBy Sofía Hanna | Wed, 05/12/2021 - 17:18
Gross fixed investment in Mexico grew 2.4 percent in February 2021 compared to the previous month, according to INEGI, but fell 3.5 percent year on year. The growth was caused in part by a 2.6 percent increase in construction investment and a 1.5 percent in machinery and equipment.
"Gross fixed investment began to decline in mid-2018, collapsed with the COVID-19 emergency and has subsequently shown an upward trend for a partial recovery," Julio Santaella, President of INEGI, said to Forbes. Due to the pandemic, the Mexican economy contracted by 8.2 percent in 2020, its worst collapse since the Great Depression of 1932, according to INEGI. Remittances, however, have been growing steadily and reached US$4.1 million in March, reflecting a 2.6 percent growth, as previously reported MBN. March’s remittance represented a new historical maximum but it was also their smallest advance in 11 months. The slow growth of remittances is also seen in overall investment. According to a report by Banco BASE in Expansión: "Investment is showing negative trends due to the political and economic uncertainty in Mexico caused by the current administration, which has promoted an agenda that focuses on reversing the structural reforms of the last three decades and aims to increase the role of the State in the Mexican economy." February saw the gradual reopening of the country after many activities were closed last April and May due to the coronavirus pandemic.Other types of investments, such as government bonds, are of less interest to investors. "For the first time in the history of our surveys, we found a negative majority opinion on the advisability of adding risk positions to Mexican local government bonds," says Credit Suisse. Other national investments, such as CETES, have also seen less interest. Forbes claims that investor’s interest will depend on the result of the midterm elections where the Chamber of Deputies is at stake.