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mexico economy

Light vehicle production and exports in July show mixed performance

by Chief editor of world-today-news.com August 7, 2024

written by Chief editor of world-today-news.com

In July, the automotive industry in Mexico was at two speeds in production and export, reported the National Institute of Statistics and Geography (INEGI).

According to the Administrative Registry of the Light Vehicle Automotive Industry (Raiavl), kept by Inegi, the production of light vehicles in Mexico reached a volume of 302,309 units, which represented an annual growth of 2.70 percent, the lowest growth rate since August 2023. Likewise, the assembly of light vehicles linked four months with annual advances in July.

Light trucks accounted for 75.9 percent of total production, while the remainder was accounted for by automobile manufacturing.

For its part, the national industry exported 271,469 light vehicles in July, which represented a decrease of 1.56 percent compared to July 2023, ending a streak of 19 annual upward readings.

Inegi recalled, as it announced last Friday, that 124,761 light vehicles were sold during July, 12.56 percent more than the same month last year, since it was its best July since 2016.

Inegi figures reveal that in the first seven months of the year, the production of light vehicles amounted to 2 million 298 thousand 445 units, which represented an increase of 4.90 pon compared to the same period in 2023, practically at the same level as in 2019, before the pandemic.

The Inegi report, which comes from 23 companies affiliated with the Mexican Association of the Automotive Industry (AMIA), Autos Orientales Picacho, Giant Motors Latin America and Great Wall Motor Mexico, stated that from January to July, 1,986,263 units were exported, which represented an annual growth of 8.44 percent.

As the Mexican economy grows at a rate of 1.9 percent annually and consumption begins to moderate, domestic vehicle sales have slowed down, from sales of 119,985 units in May of this year to 122,929 and 124,761 vehicles in June and July, respectively. Meanwhile, production fell by 12.77 percent compared to June and exports by 6.62 percent.

#Light #vehicle #production #exports #July #show #mixed #performance
– 2024-08-07 15:57:08

August 7, 2024 0 comments

Business

Trump’s trade threats are “not a big deal” – Buenrostro

by Chief editor of world-today-news.com August 5, 2024

written by Chief editor of world-today-news.com

Mexico City. The threats of Donald Trump, the Republican candidate for the presidency of the United States, to impose new tariffs are not considered a problem for the Mexican government, and everything indicates that the relationship with our country will not change, said Raquel Buenrostro, head of the Ministry of Economy (SE).

“In the case of Mexico, we don’t see much of a problem (with the threats). Even Trump just said it a few days ago, as you know, the Treaty between Mexico, the United States and Canada (T-MEC) was the result of a negotiation between President Trump and President Andrés Manuel López Obrador,” he said.

Buenrostro’s statements come after Trump recently indicated that if he wins the presidency of the United States, he will impose tariffs on more Mexican products and also threatened to close the border with our country.

“Just last week (Trump) said he was very satisfied with the results of the treaty, that he saw that it had yielded good results and that it did not need a revision, we see that he has no interest in modifying the commercial relationship with Mexico,” Buenrostro said after participating in an event.

It is worth remembering that since the end of last year, Mexico has consolidated its position as the main commercial partner of the United States, according to official reports from the neighboring country.

Tesla’s announcements do not scare away investment

Asked about whether the announcement made by tycoon Elon Musk to stop investing in building a plant in Nuevo León until the elections in the neighboring country are over, the head of the SE considered that this will not stop the desire of other companies to come to Mexico.

He also stated that the Mexican government has no “records of investment in Tesla, they have never registered investments, they made announcements in the media but there is no official procedure in accordance with the Foreign Direct Investment (FDI) law in Mexico.”

“It doesn’t affect (the fact that they are going to cancel the investment). We have notices, historic announcements and the records have also been historic. In the first quarter we had 20 billion dollars, which is more than 50 percent of what we had last year, so the investment is going very well.

“It does not at all (stop investment in Mexico) Tesla’s market is a high-end, private and small market, and popular automotive companies or larger manufacturers continue to build a lot and advance,” added the official.

#Trumps #trade #threats #big #deal #Buenrostro
– 2024-08-05 05:48:58

August 5, 2024 0 comments

Business

Mexico’s economic growth to slow 1.5% in 2025: Moody’s

by Chief editor of world-today-news.com August 4, 2024

written by Chief editor of world-today-news.com

Mexico CityMoody’s projects that Mexico’s growth for next year will slow to 1.5 percent, after a 2.4 percent advance in 2024, due to a cut in public spending and the effect of a slower push from the US economy. The risk firm explains that both the country and Brazil have so far benefited from the relocation of supply chains, but a “substantial slowdown is expected in the second half of the year,” due to external conditions.

“The outlook for Mexico and Brazil indicates a substantial slowdown in the second half of this year, as the US economy cools and authorities in China struggle to boost growth. Although Mexico’s exports to the United States and remittance income are still trying to reach records, we expect these two key supports to change as the US labor market gradually slows. It will also slow the reduction in public spending, as the incoming administration foresees a lower fiscal deficit,” Moody’s said.

While the Mexican economy is expected to slow, particularly in terms of public spending, Moody’s notes that the momentum of investment in Mexico will continue, despite any uncertainty that may be generated by the majority of Morena and its allies in Congress and the proposed constitutional changes that are being discussed. “While the proposed reforms have shaken the markets, we believe that the margin for their follow-up is narrow and we do not expect developments here to affect growth prospects this year or next,” it said.

Moody’s noted that while “not enough to prevent a broader slowdown, foreign direct investment in Mexico’s manufacturing sector is at its highest level in ten years, as global manufacturers continue to seek an alternative to China.” Much of this is due to wages, as salaries in the country are currently 40 percent lower than in the Asian economy.

“In 2010, Chinese factory wages were lower than in Mexico, but this cost advantage has eroded amid slower growth in the Chinese workforce. Today, monthly compensation for manufacturing workers in Mexico is about 40 percent lower than in China and compares more favorably with Southeast Asian manufacturing bases,” he said.

Amid a trade war between China and the United States, Moody’s estimates that the latter’s protectionism would have a more widespread impact on Mexico than on any other Latin American economy, due to the reduction in US imports, less migration of compatriots to that country and therefore a drop in remittances that “would put the Mexican economy in trouble.”

#Mexicos #economic #growth #slow #Moodys
– 2024-08-04 23:10:54

August 4, 2024 0 comments

Business

Pemex support reaches $81 billion, risk for Mexico’s rating: Fitch

by Chief editor of world-today-news.com August 4, 2024

written by Chief editor of world-today-news.com

Mexico City The current administration has provided support to Petróleos Mexicanos (Pemex) for 81.8 billion dollars, which has helped the oil company to pay its debt immediately. However, the company’s finances represent a pressure for the country’s sovereign rating, and this could be lowered if the debt increases as a proportion of the gross domestic product (GDP), due to the lack of fiscal measures that compensate for the aid to the state company, warned Saul del Real, director of Latin American Sovereigns at Fitch Ratings.

“Pemex will continue to be a burden on the sovereign’s fiscal position, but we do not expect any change in the government’s willingness to support it financially,” the analyst commented. On this point, already assuming that aid to the company will continue in the next administration, Del Real commented that Claudia Sheinbaum, Mexico’s virtual president-elect, “will fall short in providing an absolute guarantee for Pemex’s debt or a capital injection that improves the company’s financial profile.”

Pemex, which is one of the Latin American oil companies with the lowest rating by Fitch, is generating practically half of the cash flow it needs to cover debt and operate, reported Adriana Eraso, director of Latin American Corporates. Of the 12 billion dollars that, according to estimates by the risk rating agency, the oil company would be generating, up to 9 billion would be absorbed by interest payments while investment costs average 10 billion dollars, the analyst explained in a virtual seminar.

“Everything that the company is generating and that should go to capital expenditure, to exploitation, which is the business that is really making money for the company, is not going in that direction, it is going to pay interest,” emphasized the analyst, who recalled Pemex’s rating of CCC-, which makes its debt highly speculative in the market. This despite the fact that both Del Real and Eraso reiterated that a default by the Mexican company is not expected, due to the support it has from the federal government.

According to Fitch’s GRE assessment of corporations that have a sufficiently close link with a government, such as a parent company and subsidiary, the recurring support provided by the federal government is not being counted for Pemex because “it is not significant enough (…) to see a change in operations”; Petroperu is in the same situation.

“The reason is that, although we have seen some support in the form of financing, capital injections or guarantees for banks and some types of loans, this particular support comes too late, just to avoid a default event. However, it is not significant enough for us in order to see a change in operations that is making these companies weaker,” Eraso justified.

Saul Del Real explained that Pemex’s weight has been declining as part of the Mexican economy, but due to its “strategic importance,” since 2019 the State has helped it every year with about one percent of GDP, which has affected fiscal accounts. According to Fitch’s forecasts, the fiscal deficit in Mexico will reach 5.4 percent of GDP in 2024 – above the 3.2 percent average for other economies with a BBB rating.

However, Del Real acknowledged that the oil company’s debt has fallen as a proportion of GDP, closing last year at 5.9 percent, well below the 10 percent it reached in 2020, when the Mexican economy also collapsed due to the coronavirus pandemic. “We are seeing a reduction in the size of the responsibility for containment that this represents for Mexico (…) state support for Mexico has become recurrent,” the analyst added.

#Pemex #support #reaches #billion #risk #Mexicos #rating #Fitch
– 2024-08-04 19:51:15

August 4, 2024 0 comments

Business

SE predicts that Mexico will soon enter the top 10 global economies

by Chief editor of world-today-news.com August 4, 2024

written by Chief editor of world-today-news.com

Mexico City. Under the current government, Mexico has gone from being the 15th largest economy in the world to the 12th and could soon enter the top 10, said Raquel Buenrostro, head of the Ministry of Economy (SE) on Tuesday.

Participating in the event “Relocation in Mexico: Opportunities for the Development of Talent in Digital Skills”, he pointed out that the country’s progress is a reflection of what is currently happening, with a policy that combines global and local needs.

“Mexico, at this moment, has gone from being the 15th largest economy to being the 12th largest economy in the world, remember a little while ago. We are the twelfth largest economy in the world, if we continue at this pace, we have very, let’s say, very optimistic expectations that we could soon be in the top ten of economies globally.”

The official highlighted that during the current government, Mexico has registered record figures not only in investment, but also in employment, minimum wage, average wage, foreign investment, exports, among others. “We are breaking many historical records.”

He added that in terms of trade, China has also been displaced as the main supplier of the United States, which is our main trading partner. In addition, from January 1, 2023 to June 2024, 521 investment announcements have been identified and the potential for direct job creation is 297 thousand new jobs.

“This will materialize in the next two to three years and investment announcements continue to accumulate and are materializing more and more quickly. This makes us very happy and we like to generate the opportunities that our country and our youth need,” he said.

Buenrostro stressed that Mexico is the ninth country in global exports and, therefore, what is sought is to make tools available to all young people so that they can develop the skills required in all courses that are English, technology and specialized.

#predicts #Mexico #enter #top #global #economies
– 2024-08-04 02:32:31

August 4, 2024 0 comments

Business

Consumption stagnates, grew 0.1% in June: BBVA

by Chief editor of world-today-news.com July 16, 2024

written by Chief editor of world-today-news.com

Mexico Metropolis. Non-public consumption slowed down. In June, this indicator grew by 0.1 % in comparison with the earlier month, whereas in Might it elevated by 2 %, in accordance with BBVA Mexico, the financial institution with the most important presence amongst these working within the nation.

Presenting the BBVA consumption indicator, measured by the variety of transactions carried out in its techniques, within the sixth month of the 12 monthsThe providers section registered a fall of 1.2 %, whereas spending on items rose 0.4 %.

Throughout the providers sector, there was a differentiated efficiency, with elements related to tourism with progress in eating places of 5.9 % and in motels of 1.2 %, whereas the remainder of the providers as a complete had a fall of three.4 %.

The monetary establishment indicated that the slowdown in spending on providers is in step with the slowdown within the tertiary sector that has been recorded since March, as indicated by the latest information from Inegi, which report a mean fall on this section of 0.3 % through the months of March and April.

“The lack of momentum in retail gross sales coincides with the slower progress that the actual wage invoice has begun to register, because the gradual progress of the trade materializes in much less job creation on this section,” he stated.

On the similar time, BBVA stated, the newest figures from the Mexican Social Safety Institute (IMSS) present that the variety of employees affiliated with this establishment in June solely elevated by 1.9 %, which represents the bottom determine since March 2021 and registers a mean year-on-year progress of two.5 % through the first half of the 12 months, 1.3 proportion factors under what was noticed in the identical interval, however in 2023.

He famous that throughout the consumption of products, spending on meals grew by 0.9 %, whereas spending on well being care items contracted by 0.8 %, which represents the fourth consecutive decline since March.

“Contemplating the June determine, meals spending is 8.5 % above its January degree, whereas consumption of well being care items is barely 0.7 % above that very same threshold,” he stated.

Relating to consumption by kind of multinational, spending in bodily shops stagnated through the interval, whereas consumption in on-line institutions decreased by 1.5 %.

On-line spending is now 6 % above its January degree, whereas in-store spending is 2.1 % above that very same threshold. Spending on gasoline fell 0.5 %, the primary since March.

“We estimate that decrease employment progress within the industrial sector, in an setting of slowing exterior demand and excessive rates of interest, will set off a decrease dynamism in consumption within the following months. This anticipates a tougher outlook for the financial system within the second half of the 12 months, with decrease progress in consumption and funding,” added BBVA.

#Consumption #stagnates #grew #June #BBVA
– 2024-07-16 10:23:03

July 16, 2024 0 comments

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