MEXICO CITY (El Universal).— Although the Bank of Mexico (Banxico) is respectful of the legislative process and the implementation of judicial reform, it warned that uncertainty affects investments.
He therefore reiterated that strengthening the rule of law will help capitalise on the relocation of companies that is underway and continues to advance, and for regional growth for the benefit of its inhabitants.
“The reforms that are taking place in the country, and those that are being discussed, first of all, being respectful of this legislative process of how they are occurring,” said the Director of Economic Research, Alejandrina Salcedo, during the presentation of the Regional Economies Report.
But he said that, in line with what business contacts who consult to prepare the report have been saying for some time, he commented that the general uncertainty that can arise from different factors can imply caution regarding investment decisions.
At the same time, he added, emphasis has been placed on the importance of having an environment that generates incentives for an environment conducive to investment.
“It has to be an environment of strong rule of law, as all the business contacts we have interviewed have been telling us for a long time,” he said.
Expanding economy
He reiterated that uncertainty means that business owners should be cautious when making decisions and announced that as a result of the rise in business sentiment, expectations show that regional economies will continue to expand at a moderate pace.
However, he warned that they will face challenges, and stressed the importance of strengthening the rule of law and public security.
“These measures would provide greater certainty, support the flow of investments in all regions and contribute to capitalizing on the opportunities offered by the relocation process,” he concluded.
It would trigger long-term development in the growth of regional economies in the country, to improve the living conditions of its inhabitants, he said.
Meanwhile, when elaborating on the topic of the relocation of production chains known as “nearshoring,” the chief economist of the Central Bank asserted that it is underway and continues to advance, according to a new survey that she released. “It is a generalized relocation process between sectors; it is relevant, because it was only being seen in the context of manufacturing,” she noted.
It will take time to materialize to a greater extent, he considered, which could occur around 2026 and 2030, for which it is important to follow up. In this context, he pointed out that the reinvestments of companies located in Mexico are serving to continue participating in this relocation process, but also those that are benefiting the most are those of national origin.
Mexico Among the countries with the lowest growth: OECD
The Group of 20 (G-20) has Mexico as one of the countries with the largest economic deficit.
Bad second trimester
The Organisation for Economic Co-operation and Development (OECD) said that the countries that grew the least in the second quarter of the year were: Turkey, the European Union, Australia, France, Italy and Mexico. The economies that registered a contraction were: Germany with -0.1% and Korea -0.2%. While the countries that grew the most were: Saudi Arabia 1.4%, Brazil 1.4%, India 1.3% and Indonesia 1.2%.
They remain stable
The OECD said GDP growth among G-20 countries remains “relatively stable in the second quarter of 2024, at 0.7% growth.”
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2024-09-20 06:20:09