Narayan AmmachchiMexico has dropped to the bottom of the 2025 Kearney Foreign Direct Investment Confidence Index (FDICI), landing 25th out of 25 countries. This marks a fall from 21st in 2024 and puts it well behind its North American neighbors — the U.S. and Canada — which top the list.
Analysts attribute Mexico’s decline to political instability. The ruling Morena party’s consolidation of power and the weakening of independent regulators have created an unpredictable policy climate. This is especially troubling in sectors like energy and telecommunications, where legal uncertainty has dampened investor sentiment.
Mexico’s FDICI history shows highs and lows. It ranked third globally in 2003 under President Vicente Fox but fell out entirely during Felipe Calderón’s tenure in 2012. After a long absence during President López Obrador’s term, Mexico re-entered the index in 2024, fueled by nearshoring and reshoring trends. However, this momentum has now reversed.
Still, nearshoring continues to bring in billions. In the first half of 2023, the automotive sector alone drew over $5 billion in foreign direct investment. U.S. tech firms are also pushing Taiwanese suppliers to shift AI hardware production to Mexico.
Despite its overall drop, Mexico ranks sixth among emerging markets — behind China, Brazil, and the UAE but ahead of Argentina and Thailand.
But challenges loom. Political volatility, potential trade friction with the U.S., and the 2026 USMCA review threaten future inflows. For now, investors remain cautious, even as manufacturing keeps Mexico in the global game.
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