August 16, 2022

Mexico unveils $14 billion investment plan to gee up economy

MEXICO CITY (Reuters) – Mexico’s government and business leaders on Monday presented a series of planned investments worth nearly $14 billion which President Andres Manuel Lopez Obrador hopes will help to lift the struggling economy.

FILE PHOTO: Mexico’s President Andres Manuel Lopez Obrador delivers his second state of the union address at National Palace in Mexico City

Ranging from highways, to a train line connecting Mexico City with the central city of Queretaro and investments to strengthen state oil firm Petroleos Mexicanos (Pemex), the plans comprise some 39 projects, government presentations showed.

The package is the first major sign of corporate leaders’ readiness to invest under Lopez Obrador since the coronavirus pandemic plunged Latin America’s second-biggest economy into its biggest slump since the Great Depression this spring.

At a joint news conference with some of Mexico’s top business representatives, Lopez Obrador hailed the announcement, worth over 297 billion pesos ($13.83 billion), as a major step forward for the economy.

Since taking power nearly two years ago, Lopez Obrador has had a choppy relationship with business, angering companies and allies of Mexico by threatening to tear up contracts worth billions of dollars signed under the previous government.

The leftist Lopez Obrador insists that past governments were permeated by corruption and skewed the economy in favor of private interests, particularly in the energy sector.

The chill in investor confidence that set in under Lopez Obrador helped to tip Mexico into recession in 2019 before the pandemic battered the global economy.

Monday’s investment package was the first of what business leaders say should be a series of investment announcements. The first batch should create some 185,000-190,000 jobs, Jorge Nuno, a senior finance ministry official told the news conference.

($1 = 21.4730 Mexican pesos)

(Reporting by Mexico City newsroom; Editing by Dave Graham and Grant McCool)

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