The International Monetary Fund (IMF),the powerful organization that oversees the global financial system,significantly raised its economic forecast for Mexico this month and in fact,warned that the economy South of the Border may be in danger of “overheating”.
Latin America’s second largest economy is racing out of the recession at a 4.5% growth rate,faster than the U.S. and a full three points higher than previous IMF predictions. International capital is now flowing faster into Mexico as this emerging market is accelerating. Lower debt and sound economic fundamentals are getting the attention of individual and institutional investors alike.
International investors are now seeing the Mexican economy improving month by month,week by week. Mexican currency is up 2.4% this year against the dollar,the best performance of 16 of the most traded currencies,save the Yen. Mexico has the lowest tax index of any modern country and is experiencing double-digit growth in its bank lending sector,right in the middle of a world-wide recession.
Perhaps the hottest spot in the Mexican economy is the coastal real estate market,expected to grow faster than any segment in the Americas and Internationally. For example,Playa del Carmen,located in the heart of Mexico’s Caribbean coast,was recently named the fastest growing area in the world by Guinness Book of World Records and the town of Tulum,just to the south,is poised to grow exponentially faster.
Despite media headlines of raging drug wars,in the face of such strong,irrefutable macroeconomics,the perception of Mexico as a risk economically is quickly fading,leaving even its most outspoken detractors a little speechless. Some critics who are talking say Mexico is “overheating”,while others just simply say,“It’s Hot!”.