Mexico is no longer among the 10 most attractive countries in the world for investment, according to the 23rd annual Global CEO Survey conducted by PricewaterhouseCoopers (PwC).
Presented Monday at the World Economic Forum’s annual meeting in Davos, Switzerland, the survey asked 1,581 CEOs in 83 different countries the question:
“Which three territories, excluding the territory in which you are based, do you consider most important for your organization’s overall growth prospects over the next 12 months?”
The United States was the most commonly cited country followed by China, Germany, India, the United Kingdom, Australia, Japan, France, Brazil and Canada.
Unlike 2019, when Mexico ranked as the ninth most attractive country for investment, there was no spot in this year’s top 10 for the nation.
The newspaper El Economista reported that it is only the second time that Mexico has been absent from the top 10 in the PwC survey after appearing on the list the previous year. The same happened in 2018 after global CEOs rated Mexico the eighth most attractive country in which to invest in 2017.
Clues to Mexico’s absence this year may lie in the main economic threats identified by CEOs in the regions of North America and Latin America.
Cyber threats, policy uncertainty and trade conflicts were identified as the top three threats in the former region, while populism, uncertain economic growth and policy uncertainty were the top three in the latter.
Since President López Obrador took office in late 2018, policy uncertainty has been cited by several financial institutions and international organizations as a factor in cuts they have made to Mexico’s economic outlook.
Just last week, the leaders of two influential business groups said that policy changes that are friendlier to the state than private enterprise are scaring away foreign investment.
The third most commonly cited threat for North America – trade conflicts – is now less of a concern for Mexico due to the signing of a revised version of the United States-Mexico-Canada Agreement (USMCA) in December.
However, PwC conducted its survey in September and October last year when there was still considerable uncertainty about the new pact. Just a few months prior, United States President Donald Trump had threatened to impose blanket tariffs on Mexico’s exports if the government didn’t do more to curb migration.
Of the three main threats identified for Latin America, the second – uncertain economic growth – is particularly relevant to Mexico.
The economy stagnated in 2019 and the outlook remains pessimistic as far as the International Monetary Fund is concerned: it cut its growth forecasts for both 2020 and 2021 on Monday to just 1% and 1.6% respectively.