Home Business-new Private investment in Mexico will not return soon.

Private investment in Mexico will not return soon.

by Yucatan Times
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MEXICO CITY (Dinero en Imagen) – It will be until 2022 or 2023 when most companies return to invest in their growth. Survival is still the main challenge and revealed the study Perspectivas de la Alta Dirección en México 2021. They were emerging in the face of the new reality, prepared by KPMG.

In what year will investment plans return?
“More than 50% say that, in the medium term, between 2022 and 2023, very much in line with the expected economic recovery, only 14% plan to resume investment plans this year,” said Celin Zorrilla, lead partner of Clients and Market of the firm, about the goals of the companies.

Besides, the specialist pointed out that most businessmen reduced or decreased their investment plans, which must be added that they believe that the pandemic has gotten out of control.

Regarding the economic and health crisis, 70% of senior management considers that in 2021 Mexico faces a pandemic out of control, and 64% foresees a severe economic recession,” he said.

The economic situation for companies is complicated; this year will also be one of the low sales, 53% of those surveyed in the study foresee that income will contract; hence seven out of 10 businessmen consider that it will not be until three years from now when sales will increase.

In this context, explained Zorrilla, the main challenges facing Mexico this year are: to ensure investor confidence to underpin economic growth, minimize permanent damage to employment, production, and guarantee financing for companies.

Jorge Caballero, a lead partner of Impuestos y Legal, mentioned that, before the pandemic, the concerns of senior executives in our country were different, focused on combating corruption and tax evasion. Still, now the health of employees and the need for tax incentives have climbed to the top of the list.

Although the vaccine against covid-19 is positive news for companies, business strategies have changed due to the pandemic. According to the KPMG study, 56% of companies will opt for hybrid models for their business, and only nine percent plan to return to their old way of working.

In this regard, Gerardo Rojas, a leading partner of Asesorías, explained that companies have sought to transform and become more digital, which will continue, as they will seek to increase their productivity and efficiency through technological tools.

Among the changes brought by the coronavirus is teleworking. This year 45% of workers will continue with this scheme, the study revealed, which will also directly impact offices, as 38% of companies will modify the amount of rented space.

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