Mexico Holds 11th Place Globally in Foreign Direct Investment

Despite global headwinds, Mexico held firm as a top investment destination in 2024, ranking 11th worldwide for FDI. The country attracted US$37 billion, driven by strong performance in manufacturing and logistics, according to the United Nations Conference on Trade and Development (UNCTAD). While global FDI flows weakened amid rising economic uncertainty, developing economies like Mexico showed resilience.

In 2024, Mexico’s FDI  was US$37 billion, up slightly from US$36 billion in 2023, according to the UNCTAD. UNCTAD’s World Investment Report 2025 attributes the growth in FDI to strong activity in Mexico’s manufacturing and logistics sectors. 

Globally, however, the FDI landscape showed increasing signs of stress. The United States led global inflows with US$279 billion, followed by Singapore with US$143 billion, Hong Kong with US$126 billion, China with US$116 billion, Luxembourg with US$106 billion, and Canada with US$64 billion.

The report warns of deteriorating global investment prospects, as macroeconomic indicators point to slowing GDP growth, weaker capital formation, and declining trade, all key drivers of cross-border investment. Investor sentiment has also declined, with high debt burdens, political instability, and currency volatility dampening FDI appeal in many regions. Leading confidence indicators such as Purchasing Managers’ Indexes (PMIs) have softened across major capital-exporting economies.

In 2024, the United States saw a 19.7% increase in FDI inflows, while China experienced a 28.8% year-on-year decline. Overall, global FDI fell 11% to US$1.53 trillion once adjusted to exclude volatile financial flows through EU conduit economies, which would have otherwise shown a misleading 4% increase.

In Latin America and the Caribbean, cross-border mergers and acquisitions (M&A) collapsed. Net sales plunged 85%, from US$11.1 billion in 2023 to just US$1.6 billion in 2024. A major factor was Iberdrola’s sale of a 55% stake in its fossil fuel power assets  to Mexico Infrastructure Partners for US$6.2 billion.

Despite these challenges, developing economies proved relatively resilient, accounting for 57% of global FDI inflows. Total investment to these economies held steady at US$867 billion, reflecting stability in the face of tightening financial conditions and geopolitical uncertainty.

FDI in Mexico’s Industrial Sector Declines Amid Trade Policy Uncertainty

Despite solid FDI performance in 2024, Mexico’s industrial sector faced a significant setback in early 2025. Heightened uncertainty surrounding US President Donald Trump’s trade policies contributed to a 17.5% year-on-year drop in FDI, according to Mexico’s Ministry of Economy. FDI in the sector fell from US$14.81 billion in 2024 to US$12.22 billion in the first quarter of 2025.

All five pillars of Mexico’s industrial economy, which are manufacturing, mining, electricity, water, and construction, recorded contractions, reports the Ministry of Economy. Construction experienced the sharpest decline, plunging 207% despite expectations tied to the upcoming FIFA World Cup 2026. The electricity and water sector saw a 47.8% drop, followed by manufacturing with a 28.9% decrease and mining with a 9.4% decline.