Respected financial experts at Moody’s,Forbes,the New York Times and the Latin American Herald Tribune have been busy reporting on Mexico’s “stable outlook” and growing status lately,calling Latin America’s second largest economy a “good investment.”
“One reason I think it’s an interesting time for Mexico is that its economic fundamentals are decent,” shared Rebecca H. Patterson,chief investment officer of Bessemer Trust,in a Feb. 9 interview with the New York Times.
In addition to the fact that Mexico shares a border with the United States,experts cite the nation’s resilient economy,strong fundamentals,low deficits,moderate debt growth and ongoing fiscal consolidation as solid reasons why investors can expect growth of at least 3.3 percent and as much as 4.2 percent in 2015; numbers that are right in line with overall growth in the global economy,may we point out.
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“Over the next decade,Mexico will become [Latin America’s] largest economy and one of the emerging markets’ most dynamic,” predicts a recent report by Norman Equity Research.
Analysts at Goldman Sachs agree,forecasting that Mexico will be the world’s seventh-largest economy by 2020 and will account for at least 8 percent of the world’s gross domestic product (GDP). In fact,a positive outlook regarding the stability of Mexico’s economic future is the norm among analysts,with the International Monetary Fund (IMF) predicting that Mexico’s GDP will hit at least 4 percent in 2015 – a level it is expected to maintain or increase for the next five years.
“Mexico’s strong fundamentals,sound policy framework and skillful macroeconomic management have allowed the country to deal with financial volatility and heightened risk aversion related to the exit from unprecedented monetary policies in major advanced economies,” reported the World Bank.
Forbes maintains that investors should “remain optimistic” about the strong foundation of Mexico’s new political and economic direction despite the inevitable challenges faced by all nations. Forbes also reports that Focus Economics announced that it is maintaining positive growth prospects for Mexico throughout 2015 and beyond,while the nation’s many political reforms continue to attract investors.
“The reforms we’ll see in 2015 are the ones that matter,” Ian Bremmer,founder of the Eurasia Group,told Forbes. “Telecoms,energy,that lead to more investment.”
It’s also important to point out that low oil prices are expected to boost economic growth in the U.S.,which is Mexico’s main trading partner. In fact,Forbes reports the U.S. is expected to outpace the global economic growth rate in 2015,which will help increase demand for exports from Mexico in a number of different sectors.
“Mexico is still a fundamentally sound growth story,” states a report from Capital Economics. “The reforms that the government has pushed through should begin to steadily boost the economy’s potential rate of growth.”
Finally,in its Investors Service annual report,Moody’s writes that Mexico’s moderate growth in debt,combined with the government’s ongoing fiscal consolidation is leading to a “stable outlook” as low deficits prevail.