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Mexican investments in Central America

Tuesday, March 21, 2017

A Forbes article this month discusses potential interest by Mexican investors in Central America.

Trade between the Isthmus and Mexico has in the past two decades has grown by over 13% a year, according to Forbes.

Meanwhile, commercial growth globally was only 3% annually between 2012 and 2015, according to the World Trade Organization.

Mexico in addition is among the top sources of direct investment in Central America, along with the United States and Colombia.

A recent high-profile investment was the launch last year of Volaris Costa Rica, with a hub in San José, which offers low-cost flights connecting major cities in Central America with each other and – soon – with Mexico City.

Volaris Costa Rica is a subsidiary of Volaris Mexico, owned by Concesionaria Vuela Compañía de Aviación.

Through its Claro brand, Mexico’s América Móvil is a leading telco in the region, while Cemex is a major cement supplier.

A significant limitation of looking to Central America for growth is the small size of the market - the total value of production last year among all seven countries was $250 billion, compared to United States GDP of more than $18 trillion.

But as Mexico investors face the problem of uncertain relations with the United States, Central America may be part of the solution.