Nearshoring would leave revenue of 50,000 million dollars if we promoted the investment: Barclays

The Mexican economy will manage to grow at a rate of 1.2% in 2023, despite the contraction of the GDP of the United States, still collecting the rebound effect of the recovery from the pandemic and due to the positive impact that nearshoring will bring, estimated the chief economist for Latin America at Barclays, Gabriel Casillas.

According to him, US companies will continue to leave China to bring supplies closer to factories and consumers, and Mexico will be one of the biggest beneficiaries due to its proximity to the United States.

Interviewed by El Economista, he points out that since last year there has been a significant arrival of productive investments in Mexico, which shows that nearshoring has already begun.

“If we had a government promoting productive investments, we could aspire to have income of 50,000 million dollars per year. That is the part that is not being taken advantage of yet, ”he stressed.

From New York, he explained that in 2021 the entry of 32,000 million dollars of Foreign Direct Investment (FDI) to Mexico was registered, which made the country one of the 10 largest recipients of productive capital in the world.

More than half of this figure corresponds to new investments that are attributable to this relocation of companies.

Casillas stressed that the US economy will record a 0.2% contraction next year and despite this drop in activity, US companies will come to Mexico and other Latin American countries so as not to lose their market share.

The strategist highlighted that in the first half of the year, FDI totaled 27,000 million dollars. “It’s not just reinvestment of profits, it’s the arrival of new ones due to the nearshoring that is happening.”

“In the last 10 years, reinvestment grew in a proportion of 80% against only 20% of new investments. But in 2021 and 2022 this proportion changed from 50% to 50%.

The strategist stressed that the global context favors the arrival of productive capital in Mexico. The universe of places to invest has been reduced by the war in Russia.

Big capital is disinvesting in China and Turkey and going to Latin American countries, which will benefit Mexico.

ymorales@eleconomista.com.mx