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Mexico’s Strong Economy Continues To Lead The Way For Latin America

04 November, 2015

Mexico is once again demonstrating its economic prowess among Latin American nations,thanks in large part to strong growth in its manufacturing sector,falling unemployment,recent upgrades in the nation’s credit rating,strong tourism numbers and a stable bond market,Forbes reported.

“Mexico’s manufacturing sector grew by 3.4 percent in August,” wrote Forbes contributor Nathaniel Parish Flannery. “Without a doubt Mexico is very much above other markets in the developing world. It offers a good combination of risk-adjusted returns and,above all,liquidity.” 

Like the rest of the world,Mexico’s economy might not be surging the way investors would prefer in an ideal environment,but it is doing way more than just merely surviving,which is way beyond other Latin American nations,such as Brazil. In fact,Forbes calls this fact “a success,” citing Mexico’s growing economy,falling unemployment rates (currently moving downward from 4.3 percent) and upgraded debt rating. 

In addition,many parts of Mexico’s economy – such as the automobile manufacturing sector – are linking successfully with the global economy and small-scale business activity is providing an increasing number of employment opportunities.

“Mexico’s position between two continents and two oceans,bolstered by free-trade agreements with 45 countries,has made it attractive to manufacturers,” writes Forbes. “Volkswagen,Audi’s parent company,has been building cars in the central Mexican state of Puebla for decades. The Japanese have favored Aguascalientes,to the northwest [of Mexico City]. They have turned Mexico into the world’s fourth largest car exporter.”

In addition,according to the Riviera Maya News,experts predict that Mexico will continue to come out on top,even as the rest of Latin America takes an economic hit. This is especially true when compared to Brazil,which has historically been the region’s biggest success story,until its recent recession and subsequent economic decline. By contrast,Mexico’s economy will continue to grow by at least 2.5 percent in 2015 and will be ranked among top performers,with many experts now projecting Mexico to finally emerge as Latin America’s top economy in 2016. To compare,Brazil’s economy is expected to contract by at least 3.3 percent this year,according to Bank of America’s forecast and experts believe its recession will carry over throughout 2016.

According to Vladimir Werning,head of Latin American research for J.P. Morgan,one major influencing factor in Mexico’s continued economic success lies in the wide-sweeping reforms passed by President Enrique Peña Nieto in recent years. These reforms have opened up the nation’s oil industry to outside investment,have broken up certain Mexican business monopolies and have reformed the minimum wage,as well as women’s worker rights and labor union transparency measures. 

“They changed the constitution,they pushed forward.” Werning said of Mexico last week at the Council of the Americas.

Finally,Mexico’s close economic ties with the U.S.,which is the nation’s major trading partner,has proven to be a huge bonus for Mexico,even as Brazil suffers from its increased trade ties with China over the past decade as China’s economy continues to slow.

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