Bank On Tuesday, the BBVA warned that political and regulatory uncertainty could hamper economic activity in Mexico. in the next 12 months, as well as a “historic opportunity” to increase investment in the country through the phenomenon of “nearshoring” or company relocation.
The positioning of the Spanish bank was part of its annual board meeting in Mexico, its largest market, amid rising profits and renewed optimism for the Mexican economy.
Speaking, Jaime Serra, Chairman of the Board of Directors of BBVA México, assured that the Latin American country will experience a “paradoxical but peculiar situation” in the next 12 months, when the succession in the Mexican government will happen with the 2024 presidential election.
“We will have a problem of political and regulatory uncertainty”warned.
Serra said there are fears that political and regulatory decisions will be made that hinder economic activity.
However, as opposed to the fact that the same year also has “a great opportunity to ‘get closer'”, how supply chain shifts were caused.
In this sense, Serra believed that if in these 12 months “we can maintain economic stability and promote the Middle East sector, we will fulfill the challenge facing all Mexicans today to seize this opportunity.”
“It is very likely that stability will be achieved by the end of the six-year period (…) Investors will say: “We have regulatory problems or institutional problems, but in the end the Mexican economy will move forward and offer important advantages,” he added.
Photo: www.bbva.com
From my side, BBVA Group President Carlos Torres emphasized the bank’s firm position in supporting the investment process, can mean for the country.
BBVA generated an attributable profit of €6,420 million in 2022, the highest in its history and up 38% from the previous year.
“ the private investment that nearshoring can attract represents a historic opportunity for Mexico, huge potential for growth,” he said.
Torres said it is critical to address many of the bottlenecks in various sectors in order to take full advantage of this great opportunity to attract large flows of investment such as infrastructure, labor, clean energy and others.
Also emphasized the need for collaboration between the public and private sectors, which allows for the best opportunities for companies and their decarbonization goals, He explained that this will be a key factor in the future, such as digitization, artificial intelligence, the Internet of things, satellite platforms and others.
The BBVA Group President recalled that his expectations for Mexico’s gross domestic product (GDP) for 2023 improved from 1.4% to 2.4% this year, as well as his forecast for 2024 with a more moderate growth of 1.8 %.
Eduardo Osuna, CEO of BBVA Mexico, also said that he is convinced that Mexico is a country “with a huge potential and a very high ability to seize opportunities.”
in contrast to this only a recession in the United States, as the country’s main trading partner, could affect the dynamism of the Mexican economy; while he singled out the Tehuantepec Isthmus Transistmic Corridor project as the best economic project of the current Mexican government.
Osuna explained that he also it is necessary to encourage private investment, as it makes up 75% of the country’s total investment, while only 12% comes from foreign direct investment and 13% from the public sector.
“The great challenge for Mexican businessmen and the government is how we can boost domestic demand,” he added.
He also pointed out that the total investment of the country must be scaled by 25% to have the required levels “get a lot of people out of poverty.”
(EFE)
Source: Aristegui Noticias
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
