Home Feature Spanish investment in Mexico plummets 62% after AMLO’s pause in relations with Mexico.

Spanish investment in Mexico plummets 62% after AMLO’s pause in relations with Mexico.

by Yucatan Times
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According to figures from the Ministry of Economy, Spain went from being the second country with the most FDI in Mexico to the sixth in a single year.

(CDMX – TYT) – Spain’s Foreign Direct Investment (FDI) in Mexico registered a 62% inter-annual drop in 2022, when López Obrador called for a pause in the relationship with the Iberian country, accusing some Spanish companies of “abusing the country”. The president’s statement made at the beginning of 2022 caused embarrassment for the Spanish government, which rejected the criticism against its companies.

According to FDI data from the Ministry of Economy, in 2022, Spanish investment will be 1,637.9 billion dollars, a much lower amount than that registered in 2021, when it was 4,282.8 billion. Although since the beginning of his administration, López Obrador has lashed out against Spanish companies, his discourse was focused on two from the energy sector: Iberdrola and Repsol; it was not until last year that he generalized his criticisms towards the Spanish business community and even extended them to the monarchy.

After that, Iberdrola’s current business plans no longer consider Mexico in its investments, when it used to be a priority market; this company has been the one with the greatest weight in Mexico’s energy FDI and job generation.

“The only complaint, the only question is that in other times our country was abused, and we were considered a land of conquest by the companies and by the political influence carried out at the top, at the top of the powers, both in Spain and Mexico. That is no longer allowed”, stated López Obrador in February 2022.

From 2019 to 2021, Spain’s investment in Mexico remained above 4 billion dollars a year. In 2019, the first year of the current six-year term, the investment was 4,404.7 million dollars; in 2020, 4,023.7 million. And in 2021, as already mentioned, it was 4,282.8 million.

The same data from the Ministry of Economy, at the end of 2022, indicate that there are 7,060 companies of Spanish origin with FDI flows in Mexico. Ministry of Economy highlights that 2022 is the year since they have records (1999), with the lowest number of companies that presented FDI flows to Mexico, with 190. In the last year of President Enrique Peña Nieto, 433 companies were incorporated into these flows. For the first year of López Obrador, there were 410, and for 2020 and 2021, 273 and 276 respectively.

For the first half of 2022, Spain ceased to be the second country with the most FDI in Mexico, having been overtaken by Canada. Still, at the end of the year, its position dropped much further, ending in sixth place.

The top 10 figures for Foreign Direct Investment by country ended 2022 as follows:

United States – 15,021.6 billion dollars
Canada – 3,780.1 billion dollars
Argentina – 2,315.9 billion dollars
Japan – 1,838.8 billion dollars
United Kingdom – 1,757.8 billion dollars
Spain – 1,637.9 billion dollars
South Korea – 673.5 million dollars
Hong Kong – 453.7 million dollars
France – 421.7 million dollars
China – 282.2 million dollars

Until last December, the President of Mexico maintained his position of pausing with Spain’s companies and monarchy.

When asked about “the pause” with Spain, Lopez Obrador replied: “No, the pause continues because there is no attitude of respect on their part. I sent a respectful letter to the Head of State and the King of Spain, and he did not even pay attention to answering me.”

The Yucatan Times

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