Mexico’s President Andres Manuel Lopez Obrador has announced a series of financing arrangements designed to invest nearly $14 billion in highway, rail and utility projects in the nation.
The set of projects resulted from negotiations with corporate stakeholders designed in part to strengthen relations between the Obrador administration and Mexican corporations, according to a late October Reuters report.
A passenger rail project and planned spending on oil and gas assets of Pemex are among the metals-intensive activities that could take place if the planned spending occurs.
Some of the projects already are underway, according to Reuters, but the government and corporate involvement could ensure a stable climate for them to stay on track.
Mexico’s gross domestic product (GDP) is expected to contract by 9 percent in 2020, according to a recent International Monetary Fund (IMF) assessment.
The nation’s own National Institute of Statistics and Geography calculates an 18.7 decline in GDP for the second quarter of this year.
Canada-based ScotiaBank, in an Oct. 26 LatAm Daily analysis and write-up, says Mexico’s August financial data showed recovery from that second quarter is continuing, but “progress had decelerated” in wholesale and retail sales activity.
The bank’s Paulina Villaneuva writes, “Until an effective stabilization and perhaps reduction in the number of Mexico’s COVID-19 infections is achieved, full recovery of the commercial sector is likely to be delayed.“
The bank's economist adds, “With slow progress in the labor market and gradual gains in domestic consumption, commercial activity is likely to remain weak, at least for the rest of the year.”