Friday, December 19, 2008

Mexico cuts 2008 foreign direct investment forecast

Mexico lowered its estimate of how much money foreign companies will invest in the country this year as the U.S. recession increasingly weighs on Mexico's economy.

Economy Minister Gerardo Ruiz told reporters on Friday that foreign direct investment in Mexico would fall to between $17 billion and $18 billion this year, down from $23 billion in 2007.

The government had previously estimated direct investment flows from abroad of $20 billion for this year.

The deepening recession in the United States is leading many companies to slow down operations in Mexican factories that export goods north of the border. Manufacturers have laid off some 175,000 workers this year through November.

About 80 percent of Mexican exports are U.S.-bound, and many economists think Mexico is now sliding into a recession
.
The government expects foreign direct investment will fall between 10 percent and 20 percent in 2009.

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