There has been positive news about the Mexican economy in recent months. The discovery of two huge deepwater oil fields in the Gulf of Mexico, the announcement that major international companies will be investing in the mining, automobile and aerospace sectors and the news that manufacturing is growing, with a 19.8 percent increase recorded for the vehicle industry alone in January 2013, are some of the examples of recent economic headlines.
Year-end growth was around 3.9 percent in 2012, higher than the 2.2 percent registered for the world economy. Leading economic analysts expect growth to continue into 2013, and some expect it to exceed that registered by the other Latin American economic powerhouse, Brazil. The Inter-American Development Bank forecast that the growth rate could be near 4 percent while the Mexican government has a more conservative estimate of 3.5 percent.
Mexico’s low inflation rate, financial health and stable economy have long been held up as an example in global economic forums and a rise in foreign investment is also expected this year. Indeed, an Ernst & Young report (source: Reforma) reveals that it is one of the four emerging economies other than BRIC countries (the BRIC bloc is comprised of Brazil, Russia, India and China) preferred by investors this year. The report states the following advantages the country offers: access to other markets, labor costs and political stability, also noting that it has a domestic market of over 100 million potential consumers and a better performance on the Ease of Doing Business scale. Many analysts conclude that Mexico is in fashion and will achieve even higher growth rates in the years to come, although they also recognize that important structural reforms are needed, especially in fiscal, education, agriculture, labor and security matters if it is to reach its full potential. These are all issues that the new President Enrique Peña Nieto has pledged to tackle.
