MEXICO CITY (Reuters) - Mexico expects foreign direct investment will surge by as much as 75 percent in 2010 as the global economy recovers, although the amount will still be lower than pre-crisis levels.
Mexican Economy Minister Gerardo Ruiz told the Reuters Latin American Investment Summit that direct investment from abroad, which includes new factories making goods for export, should rise compared with last year to between $17 billion and $20 billion.
Foreign direct investment plunged more than 50 percent in 2009 as Mexico trudged through its deepest recession since the 1930s. But Ruiz said manufacturers from Japan and Europe were eager to invest more in Mexico as the U.S. economy recovers.
“At the end of the adjustment from the crisis, we have seen that Mexico has had a boost to its competitiveness,” Ruiz said, noting Mexico’s exports were gaining market share in the United States.
Ruiz also said Mexico’s economy was well positioned to face any possible crisis in Europe, where policymakers and the IMF plan to bail out Greece to avoid a default of its debt.
Mexico suffered a deep recession last year despite its close trade ties with the United States, but those same ties mean it is not very connected to European markets.
“That gives us some certainty that we could handle a crisis in Europe,” Ruiz said.
Mexico sends about 80 percent of its exports to the United States and about 5 percent to Europe.
Mexico took in $11.4 billion in FDI in 2009, well below the $23.2 billion total in 2008. The Economy Ministry had previously forecast a rise in FDI to between $15 billion and $17 billion this year.
Ruiz also said Mexico has yet to decide if it will allow further sugar imports in 2010. Mexico opened a 250,000 ton sugar import quota early this year but has yet to dole out import permits for about 63,000 tons of the quota.
He said Mexico could also open an additional import quota.
At a recent congressional hearing, Ruiz said the government will wait until the sugar harvest ends around late May before deciding on any additional quotas.
Mexico’s sugar production has been declining steadily this harvest as bad weather hit crops. Local sweetener demand has added to pressure on global sugar prices, spurring more imports of high fructose corn syrup into Mexico.