The Day at a Glance | January 25 2021

The Top

· Foreign Direct Investment fell 8% in Mexico during 2020; the setback at a global level set at 42%: UNCTAD.

· The Mexican economy grew 0.9% in November (-3.5% annual), according to the IGAE.

· Biden signs executive order so that government agencies can buy more products made in the United States.

· The pandemic cost 225 million jobs at a global level in 2020: OIT.

· FED considers the upsurge in inflation this year normal because of the recovery, but it could be temporary.

Economic environment

According to figures published by the United Nations Conference on Trade and Development (UNCTAD), Foreign Direct investment (FDI) fell 42% at a global level in 2020. In total, 859 billion dollars of FDI were recorded – vs 1.5 trillion in 2019. This is the lowest level of FDI since the 1990`s, and the setback was 30% greater than the one seen in the 2008 financial crisis. The UNCTAD expects the recovery in investment flows to be slow as the uncertainty revolving around the pandemic persists and investors remain cautious. Advanced economies were the ones that recorded a greater setback in investment flows, with falls as large as 49% in the United States and close to 60% in Europe. In emerging and developing economies, the impact was uneven. China received the largest amount of foreign investment flows last year after recording 4% growth (at 163 billion dollars); India recorded a 13% rate of growth, boosted by investments in the digital sector. Contractions were recorded in the rest, with a (-) 37% setback in Latin America, (-) 18% in Africa and (-) 4% in Asia. In Mexico, the drop set at only (-) 8%, with the automotive industry being one of the most affected (-44%) to set the total worth of flows at 31 billion dollars. The UNCTAD expects foreign direct investment to continue to contract at a global level in 2021, in between 5% and 10%. Any increase in foreign direct investment figures this year would not from new productive investment but from transnational mergers and acquisitions.

Facebook Comments