21 | OCT | 2019
World Economic Forum: The Mexican economy is struggling
Mexico fell two positions in the World Economic Forum's Global Competitiveness Report - Photo: Michael Buholzer/REUTERS

World Economic Forum: The Mexican economy is struggling

09/10/2019
16:59
Newsroom & Agencies
Mexico City
Nick Zieminski
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The gross fixed investment registered its sharpest annual fall a few months ago

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In July, Mexican gross fixed investment registered its sharpest annual fall in almost a decade, underlining the fragile state of business confidence under President López Obrador, official data showed on Monday.

Data from the national statistics agency INEGI showed that when adjusted for seasonal swings, the gauge of spending on machinery, equipment, and new construction in Latin America’s second-largest economy tumbled by 9.1% compared to July 2018.

The annual decline was the biggest since November 2009.

Gross fixed investment has fallen in annual terms in all but one of the eight months for which data has been reported since López Obrador took office on December 2019.

Decisions made by López Obrador seem to have unsettled investor confidence, including the cancellation of a partly-built, USD $13 billion airport, a project he said was tainted by corruption and not properly planned.

In late 2019, López Obrador took office promising to improve economic growth to an average of 4% per annum during his six-year term. Nevertheless, the economy has struggled and narrowly avoided a recession during the first half of 2019.

Compared with June, gross fixed investment in July fell by 0.7% in adjusted terms, the third consecutive monthly decrease, INEGI data showed.

In unadjusted terms, Mexican gross fixed investment was 7.6% lower than in July 2018, the agency said.

Furthermore, it was announced that Mexico fell two positions in the World Economic Forum's Global Competitiveness Report and is now located in the 48th position and obtained negative results in regards to organized crime, press freedom, and government's vision in the long term.

On the other hand, Mexico's rate improved by 0.3 points this year and it became the second most competitive country in Latin America after Chile.

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