The World Bank warns about an economic trend that requires attention, since the trade war between China and the United States, adding to the military conflict between Russia and Ukraine, have begun to have a considerable impact on Latin America, which so far has maintained a resilient stance in the face of constant changes since the beginning of the pandemic.
Although the region has been a great example of how to deal with complex situations in economic terms during the last three years, the consequences of this trade war between East and West are starting to lower growth projections. The entity has reported that GDP in Latin America will grow by only 1.4% during the current year 2023, which represents a slightly lower advance than previously projected.
The disagreements between the United States and China in terms of equal treatment and even national security seems to be far from over, which favors the increase in the price of raw materials, freight, and monetary losses due to the delay of millions of shipments, product of other external factors such as the aforementioned war. Fortunately, it is not all bad news in Latin America, since as a result of these inconveniences on a global scale, many companies have begun to move their production centers to countries such as Mexico, which is an unprecedented growth opportunity.
Nearshoring is already an economic trend according to the World Bank
This economic trend is a response of international trade to the changes that are being seen, according to the new World Bank report “The Potential of Integration, Opportunities in a Changing Global Economy.” Companies need to remain profitable despite the current crisis and have found in this practice a way out, which has been well received by countries such as Mexico, which now becomes a partner of enormous importance in issues of production, export and import of goods.
The opening of new jobs is clearly an almost immediate benefit after the start-up of production centers that require competent personnel in the Mexican territory. As for the other benefits that can mean greater growth in the region, if nearshoring is intensified as a practice, we have a greater closeness between the company and those who provide the service, reduction in transport time and, very importantly, a quick reaction to market changes depending on consumer demand.
Continuing with this economic trend, some interesting examples of Mexican companies that have benefited from nearshoring and other commercial strategies are Softtek, Bimbo, América Móvil, Cemex, Globant, among others, positioning Mexico in an advantageous position due to its geographical location, bordering the United States, its principal trading partner.
Sources:
Así crecerán las economías centroamericanas en 2023, según Banco Mundial. Revista Summa
El Banco Mundial proyecta que Latinoamérica crecerá un 1,4 % en 2023. DW
México se hace fuerte como proveedor tecnológico de empresas extranjeras. El Economista
