June 13, 2019 / 10:48 PM / 3 months ago

Top Mexico business lobby seeks to lift private sector investment

FILE PHOTO: (L-R) Mexico's President Andres Manuel Lopez Obrador, President of the Business Coordinating Council (CCE) Carlos Salazar and Mexico's Foreign Minister Marcelo Ebrard arrive for the U.S.-Mexico CEO Dialogue, in Merida, Mexico April 12, 2019. REUTERS/Lorenzo Hernandez

MEXICO CITY (Reuters) - An influential Mexican business lobby on Thursday said it is aiming to increase private investment in the next two years to 20% of gross domestic product, up from 17.5%, signaling a shift towards better collaboration with the leftist president.

Carlos Salazar, head of the Business Coordinating Council, known as CCE, said the pledge was helped by assurances from President Andres Manuel Lopez Obrador, who signed an investment pact with the council and other representatives of Mexico’s private sector.

“He will personally be clearing the way for projects, helping them to be viable,” Salazar said. “The president repeatedly spoke about offering us guarantees of confidence and certainty.”

Mexico’s economy has struggled since Lopez Obrador took office in December. It contracted by 0.2% quarter-on-quarter during the first three months of 2019, and the central bank has expressed concern about the sluggish pace of investment.

Lopez Obrador, a leftist who has shunned foreign and private investment in some sectors, infuriated influential business figures by cancelling a partially built $13 billion airport for Mexico City a few weeks before he took office in December.

The scrapping of the airport led to major losses on Mexican financial markets. Some of the president’s other priorities, including a new publicly financed oil refinery, have been viewed with skepticism by many in the business community.

Investment should target energy, infrastructure and agriculture as priorities, Salazar said, citing highways, airports and electricity lines as examples.

The CCE hoped public investment would rise to 5% of GDP, from its current 2.8%, he said.

Lopez Obrador said on Twitter following the signing of the pact that the Mexican Business Board, or CMN, made up of about 60 companies, pledged to invest some $32 billion this year focusing on the farming, industrial and service sectors.

Reporting by Sharay Angulo; Writing by Daina Beth Solomon; Editing by Robert Birsel

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