Mexico’s supercharged economy was the focus of a recent article published by Barron’s,which reviews a report that was released by Barclays earlier this month.
“Mexico’s economy could grow at a much faster pace than had been achievable in the past,thanks to the nation’s reform agenda,” Barron’s writes.
Thanks to the rapid advancement of Mexico’s structural reforms that are currently moving through congress,the positive news for Mexico real estate is quickly adding up. In fact,Marco Oviedo of Barclays predicts that the economy will grow at a rate of around four percent this year and could easily hit six percent in the near future. Moreover,this growth rate is expected to be sustainable over time and is unlikely to drop below five percent as the next decade progresses.
Energy reform – especially within the nation’s oil sector – is key to Mexico’s continued growth,and President Enrique Peña Nieto had demonstrated his dedication to making it happen. According to Barclays,if Mexico succeeds in opening up its energy market,it would have a significant impact on future growth,adding as much as an additional 1.2 percent to the economy’s expansion. Opening up Mexico’s energy sector and modernizing its regulations will not only increase investment and oil production,but it is also expected to boost the nation’s manufacturing sector.
“We believe that a reform that solves the risk-sharing issues between the government and the private sector could increase investment additional $13 billion per year,reaching an average investment in the sector of 3.2 percent of GDP during 2014-2030.”
Also of note,ABC News reported this month that Mexico’s middle class has grown to more than 42 percent of the total population and that immigration to the U.S. has fallen dramatically. Not only is this good news for Mexican citizens,but it is also helping American companies that are looking for new markets in which to sell their products.
In addition,a growing number of college graduates and skilled workers are emerging from Mexico’s expanding middle class,which is also good news for the wide variety of corporations that have opted to conduct operations here. In fact,the number of individuals going on to college has tripled since the 1980s and continues to grow each year,while poverty rates have declined dramatically.