Research Dept. News
|
|
|
|
Monthly Report, num 348 - July-August 2011
|
|
|
International review - Mexico
|
|
|
|
|
Mexico: carpe diem
|
|
Mexico appears to remain on the sidelines of the slowdown in the world economy.
|
|
In the latest forecast scenario by the International Monetary Fund, Mexico is one of the few economies whose growth forecasts for 2011 have been revised upwards (one tenth of a percentage point compared with its April scenario, placing growth for the year as a whole at 4.7%). Certainly, Mexican economic activity seems to have remained on the sidelines of the current global slowdown in growth. Something that comes as a surprise if we remember that the paradigm of this slowdown is the United States and that the Mexican economy is closely tied to the economic performance of its neighbour to the north.
|
|
Mexico's rate of inflation falls to 3.2%.
|
|
Nonetheless, the explanation can be found, on the one hand, in the fact that Mexico is a net exporter of oil and has therefore benefited from the high price of crude and, on the other hand, in the fact that the Latin American economy has two key engines. Although its recovery was supported by its external engine and by exports of manufactured goods to the United States, the recent consolidation of the expansionary phase in the economic cycle is being boosted by the gradual recovery in domestic expenditure, helping to offset a certain shrinkage in foreign demand.
|
|
Mexico must take advantage of the occasion to push forward with reforms.
|
|
Thanks to this rebalancing, the first quarter of 2011 was better than expected for the Mexican economy in terms of economic activity and the latest indicators point to the rate of growth not altering too much in the second quarter from the first, in spite of some negative figures in April (employment and consumer confidence). And if activity is on the right track, prices are performing equally well. While some of its more renowned neighbours are battling to contain rising price, Mexico is seeing its rate of inflation fall (3.2% in May). The peso was the only thing that dared to slightly unsettle this panorama: the delay in resolving the Greek crisis and doubts regarding the strength of the US economic cycle made foreign exchange markets more volatile.
|
|
|
|
Although this volatility might continue while external doubts persist, it's true that Mexico is, for the time being and in relative terms, a peaceful backwater, economically speaking. It must take advantage of this calm period to push forward with crucial reforms in order to cement growth in the medium and long term. This involves reducing the public coffers' dependency on oil, promoting competition, reducing the weight of the informal economy and improving the educational system.
|
|
|
You can susbcribe now to be nofified by email every time the Monthly Report is updated in the internet.
|
All documents are in Adobe Acrobat format (PDF).
To view a document in PDF format you need the Adobe Acrobat Reader. If you don’t have it already loaded on your computer, you can donwload it now.
|
|
Direct link to the Research Dept. in your mobile
We'll send you a free SMS with the link
|
