Bloomberg reported late last month that Mexico is estimated to receive 11% more in foreign direct investment, (FDI), than was originally forecast.  This $20 billion in additional investment money secures Mexico's position as the second-largest economy in Latin America.  The growth is due in part to its close proximity to the United Sates and low employment wages.

Mexico also has a 25% lower manufacturing cost than the US, and is outdoing other countries in producing more engineers, making a variety of new trade pacts with other South American countries. Economists in Mexico originally predicted an FDI of $18 billion, and now are predicting closer to $19.7 billion.

Auto manufacturers such as Volkswagen AG (VOW), General Motors Co. (GM, Mazda and Nissan Motor Co.’s, have recently announced investments in Mexico of $400 million dollars or more.  Honda Motor Co. of Japan, is building an $800 million factory in Celaya, Mexico.  And Finance Minister Ernesto Cordero is expecting more announcements from other auto manufacturers by the end of the year.

Citigroup Inc.’s Banamex unit reported the auto industry generated $69.9 billion last year in exports, surpassing the $41.7 billion from the crude oil industry, $21.3 billion from remittances and tourism numbers of $11.9 billion. On August 10, Finance Minister Gerardo Rodriguez said that Mexico will receive more than $40 billion this year, including new portfolio investments.

Bloomberg also reported that slowing economic growth is speculated to keep inflation down and prompt banks to lower interest rates.  Economy Minister, Bruno Ferrari, claims this is due to managing their finances responsibly.  Ferrari says the government still expects a growth of between 3 and 4.5 percent in 2012, down from between 4 and 5 percent this year.