Mexico’s peso rose yet again in 2010 as favorable growth forecasts for 2011 were given by economists. Improved prospects for the United States,Mexico’s largest trading partner,were among the reasons cited for positive growth potential next year.
The United States purchases about 80 percent of Mexico’s exports,making the rebounding U.S. economy a driving force in the bright future for Mexico’s forecast and continued economic growth.
The peso sits at 12.3711 per dollar as compared to 12.419 on December 20. The gain is 0.3 percent,bringing the currency’s total advancement against the dollar to 5.7 percent this year alone.
Goldman Sachs Group Inc. and RBC Capital Markets announced the growth forecasts as trends in Mexico’s increased consumer spending and investor confidence became evident in a thriving economy and flourishing bank industry.
RBC Capital Markets announces to clients that the economy will grow 4 percent in 2011.
“A combination of stronger U.S. growth,strong public infrastructure investment and rebounding domestic consumer spending underpin our more optimistic view,” RBC noted to their clients. The bank’s forecast rose 0.9 percent from its earlier forecast of 3.1 percent growth for next year.
Goldman Sachs Group Inc. followed suit by raising its estimate to 4.1 percent,up 0.4 percent from its initial forecast of 3.7 percent growth in Mexico for next year.
Bloomberg Businessweek reports that,“The yield on Mexico’s 10 percent bond due in 2024 fell 1 basis point,or 0.01 percentage point,to 7.18 percent,” according to Banco Santander SA. They also report that the “price rose 0.14 centavo to 124.80 centavos per peso.”
Mexico has shown great gains in economic growth for 2010 and the prospects for 2011 continue to point to a bull market. Increased investor spending and credit growth has led many banking executives to announced double-digit growth expectancies for next year.
This news comes on the news that Mexico is a key profit center for international banks through feed and credit expansion. Some Mexican banks are even posting profits at 50% and expect similar gains in 2011.