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Mexico Real Estate News: NASDAQ Reports Mexico ‘New Safe Haven Investment’

21 December, 2012

NASDAQ took notice of the Central Bank’s revision of Mexico’s 2012 economic growth outlook, which has nudged its projected GDP numbers up to anywhere between 3.25 and 4.25 percent, which reflects an impressive increase of 25 basis points. The Bank of Mexico announced that a variety of influences have led to the additional growth projection, including rising exports. 

In addition, the bank maintained its existing inflation forecast, leaving it unchanged at anywhere between three and four percent, although some estimates predict the rate will dip even lower in 2013. Agustin Carstens, who has served as governor of the Bank of Mexico since 2010, cited the improved performance of the U.S. economy, coupled with Mexico’s continued ability to withstand the persistent global economic instability, such as what we have been seeing recently in Europe, for the nation’s robust outlook. 

“Interest rates at 4.5 percent with low inflation continue to attract investment from foreigners seeking yield, meaning an increase in capital investment for the country,” writes NASDAQ. “The [iShares MSCI Mexico Fund] has strongly outperformed some of the BRIC market funds, such as the WisdomTree India Earnings, iShares MSCI Brazil Index and the Market Vectors Russia Fund.”

When asked about the impact that European instability could have on the growth of Mexico’s GDP, Carstens expressed the strong opinion that only a “catastrophic” event could have the potential to impact growth in Mexico during the coming years. The governor also cited Mexico’s solid macroeconomic framework as a reason for its continued stability.

“Export figures from the European Commission on Trade suggest that Mexico may continue to do relatively well in the face of continued weakness in Europe,” NASDAQ writes. “Imports of goods to Europe from Mexico amount to $12.9 billion, or about 12.5 percent of Mexico’s GDP.”

This number is higher than both India and China, while imports from Mexico real estate to the U.S. neared $230 billion, which amounts to more than 22 percent of Mexico’s GDP.

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Topics: Investment