Uncertainty is likely to lead to weak investment and a shift to extractive industries, according to Citibank’s Mexican arm. Natasha Turak reports.

Citibanamex, the Mexican unit of Citibank, has reduced its forecast for 2017 FDI inflows by a third, from a previous estimate of $35.8bn to $25bn.

“The main feature of 2017 will be uncertainty and therefore weak investment,” the bank said in a report. “We expect a shift from manufacturing to extractive industries (oil and gas) and electricity, gas and water, among others.”

Greenfield FDI inflows to Mexico in 2016 amounted to $26.18bn, according to greenfield FDI monitor fDi Markets. Citi writes that for the past decade, 48% of FDI went into the manufacturing sector, much of which contributes to regional supply chains likely to suffer if NAFTA is dismantled by the Trump administration, which has threatened to renegotiate the free trade deal or scrap it altogether.  

This article is sourced from fDi Magazine
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